Risk & reward

If you have a chance, and a fresh bottle of single malt close by, read this: ‘Tax Planning using Private Corporations.

It’s the 63-page detailed discussion document on exactly how Ottawa intends to gore small business owners and incorporated professionals, including doctors, lawyers, dentists and the guy who fixes your furnace. You have until just before Thanksgiving to submit your thoughts, and here’s the addy: [email protected]. Try to contain yourself when you do so. Telling the Minister of Finance what he can do with his orifices is generally frowned upon.

As you know, Ottawa is doing exactly what this blog warned you a year ago was coming. Soon the hammer will come down on business owners or medical professionals who income-split with spouses or family members, as well as the common practice of building up retirement savings within a corporation. Bill Morneau is serious. The consult period is, of course, a stunt. These moves will be effective with the 2018 taxation year.

Now, why is it necessary to suddenly pull the rug out from under people who have been legally using small businesses to defer tax because they lack pensions or benefits and shoulder greater risk (while creating jobs)? Huh?

Here it is: “The Government is considering approaches that will improve fairness and neutrality of the tax system, such that savings held within corporations are taxed in a manner that is equivalent to savings held directly by individuals, for example salaried employees.”

This resonates with T2’s Millennial voter base, since the moisters today seem over-educated, late-maturing, helicoptered, under-employed and non-entrepreneurial, while believing in fictions like a shared economy. Overwhelmingly, the young have become risk-averse. They see ‘fairness’ as meaning every dollar should be taxed equally, regardless of the risk or effort needed to earn it, and they’re hot about equality. More on that quacking canard later.

But tax codes are not about social justice. They’re meant to build economies while raising the money to run government. Tax rules have always been designed to encourage behaviours. That’s why you get a tax credit for making an RRSP contribution, for example, because without that carrot far fewer people would save for their futures. It’s the same principle behind getting a grant when you invest money for your kid’s schooling. Or why capital gains are taxed less when you take on risk and invest in stock that could rise or fall in value.

There have always been larger rewards (in the form of lower taxes) to encourage activities people would be reluctant to be engaged in otherwise. Like starting a dog grooming business and hiring two assistants. Or completely losing your mind, rebuilding a crumbling pile of bricks and opening an ice cream parlour. Or maybe spending 12 years in med school and residency, amassing $300,000 in student debt, then building a career as a doctor. In all of these things not only is the risk higher than that which salaried employees normally take, but there are no pensions, no paid vacations and no benefits.

Starting a business and creating jobs usually involves shovelling life savings into an enterprise or a professional office, taking on debt, shouldering big insurance costs, paying your workers’ EI and CPP, collecting and paying tax, then hoping you don’t crash and burn (which most do). The reward for all this investment and risk (instead of just being a employee)  is the potential for success and a tax break for trying.

Until now. The Liberal government now seeks to make every dollar taxed equally. Neutrality, Bill Morneau calls it. Money hard earned and held inside a small business should be taxed as if had been paid, no risk, to a salaried person. In T2’s world we’re all equal. When we aren’t. Not even close.

Well, income-splitting will be toast next year. Impacted will be medical professionals who will be looking for higher compensation, shorter hours or other jurisdictions – since the ability to split income with a spouse compensated for a truncated career and zero pension.

Gone, too, will be the ability to effectively build a retirement nestegg within a corporation, the way salaried people do inside the registered pension plan offered by their employer. Ottawa is studying several models to ensure that money a business has already been taxed on has its growth taxed at the highest personal marginal rate prior to being available to the retiring business owner. It may also increase business tax rates to about 50% on any earnings not immediately reinvested in the business. In short, the goal is fairness between boss and worker. And it makes you wonder, why would anyone want to be the boss?

Finally, the government is studying differing taxes for men and women.

Seriously. More tomorrow.

245 comments ↓

#1 Paul on 07.29.17 at 5:00 pm

They wonder why there is the under ground economy.

#2 Prairieboy43 on 07.30.17 at 1:55 pm

Might have to join SM in St. Martin. Auction next month. Join Gilligan, Ginger and go for long cruise.

PB43

#3 h.e. on 07.30.17 at 1:57 pm

Anyone from KPMG want to weigh in on how you’re advising your clientbase of doctors, lawyers, on how to get $$$ out before the axe falls?

#4 Russ on 07.30.17 at 2:06 pm

Thanks for the post Garth.

I shall forward this to my business friends.

As a salaried guy, with a non-working spouse, I have envied their income splitting arrangements. But there is nothing fair in this initiative.

I believe to be fair let’s look at “family income” where a man & wife can submit joint tax forms and both earn and pay half of what comes into the household. And don’t discount that in other legislation she has half of my income in a divorce so why do we have to pay maximum tax while married (to each other).

Leave the damn small corporations as is and improve the truly unfair sections, is what I say!

Footnote: As a salary guy I have lost most of the pension benefits that you point out in a bankruptcy of the previous company so our tax structure is doubly unfair to someone in my position.

#5 what a mess Canada has become.. on 07.30.17 at 2:09 pm

i’m nearing the end of my healthcare career. T2 will speed the process . Will consider part time. Love my job and fear boredom

healthcare landscape will be interesting in the 3-10 yrs. A severe shortage of doctors south of the border is projected over the next 20 yrs. . I’d be stunned if we don’t lose a steady stream of Canadian doctors. STUNNED

#6 jason gouin on 07.30.17 at 2:10 pm

“Finally, the government is studying differing taxes for men and women.”

What the hell does that mean? Knowing this government and as a male this is very scary. I would think men make on average higher income, therefore pay higher tax already. Why do I feel like some ‘equality tax code’ is coming which will be the opposite of equal.

#7 Cherry Picker on 07.30.17 at 2:13 pm

Well maybe if the gap between the rich and the rest were shrinking, they’d stop tinkering; but it is growing. I’m not saying their plan isn’t wrong headed, but they are trying to help close that gap. If they would just reduce income tax and corporate taxes for all and replace the lost revenue with a wealth tax, they’d finally be on the right track. But that would only happen if democratic capitalism replaced crony capitalism, which isn’t very likely.

#8 Keith in Calgary on 07.30.17 at 2:14 pm

Want fairness and equality ?

Wipe out all deductions……..everyone regardless of gender, occupation, age or source of income pays XX %.

#9 Lee on 07.30.17 at 2:21 pm

I heard too that JT wants to reduce taxes on single moms and women the year and year after they have a child. Doesn’t sound like a crazy plan.

#10 The Real Deal on 07.30.17 at 2:24 pm

Finally, the government is studying differing taxes for men and women.

Lol. This is just so dumb on so many different levels. That would be just about the time the Government of Canada ‘jumps the shark’ so to be speak.

Canada = Open Air Gulag.

#11 The Technical Analyst, CSTA, CPD on 07.30.17 at 2:32 pm

This is one of the main issues (after working around the world) the bothers me most about returning home and working again in Canada.

Bolshevik style Socialism.

I have no issues with helping the lowest rise, but hand up not hand out.

Thanks to JT (or T2) Canada seems to only want to tax the successful and remove the motivation to be “better” when “average” is good enough.

Quite sad really as any student of history knows how Bolshevik style Socialism ended and benefited no one.

#12 For those about to flop... on 07.30.17 at 2:32 pm

Pink Lemonade stand in Vancouver.

This one was one of my earlier cases and they are still going for it 6 months later.

Another price drop after picking it up to flip for 1.58 in June 2016.

It is nearly a ten year old condo and for that sort of money if you want some dirt you can easily pick up something half decent in East Van for the same money even though it is still vastly overpriced.

The assessment came in well short at 1.4 despite coming up a bucket load.

I would still rather be these guys than the couple of cases I have out in Richmond ,where they forked out over 3 million each on condos to save a few bucks on massaging chairs as the planes take off and land…

M43BC

902-1277 MELVILLE ST VANCOUVER.

Feb 21:$1,650,000
Jul 26: $1,598,000
Change: – 52000.00 -3%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=RDAwMDA5RUtDSw==

https://www.zolo.ca/vancouver-real-estate/1277-melville-street/902

#13 MF on 07.30.17 at 2:34 pm

Not all of we millennials are that stupid. It’s usually the younger, more coddled, liberal leaning crybabies.

I’m 34. Most of my friends voted for someone else.

I also wouldn’t blame just millennials for T2. Lots of older folks voted to “get Harper out”.

Those idiots (older who voted T2) are getting what they asked for.

MF

#14 diharv on 07.30.17 at 2:35 pm

My acct said he’s keeping and eye on this pending legislation . I’m already paying the highest rate on passive income so no difference there . The funds held inside the corp are for retirement so that is the concern . The only consolation is that these business killing changes will be rolled back immediately on T2’s defeat in the next election. He should be careful with the punitive measures on the entrepreneurial risk taking backbone of the Canadian economy . It’s not going so well for Venezuela now , a country where socialist policies all but killed entrepreneurship .

#15 SoggyShorts on 07.30.17 at 2:42 pm

If I’ve been paying myself dividends and investing leftovers within the company should I pull more out this year? Should I switch to salary for next year?

I chose dividends because I didn’t want to pay double CPP, but now with years of zero contribution won’t my CPP checks suck if I ever do get them?

#16 Property Accountant on 07.30.17 at 2:43 pm

I read most of that paper and would agree on passive investments being taxed in corporation according to new, proposed rules (canadian corporations currently pay only 20% tax on income, claiming small business reduction, versus likely higher rate in the hands of the owner).

“Income sprinkling” can be circumvented by paying salaries to family members, as new proposed rules will not apply to employment income (TOSI rules, page 24), although reasonableness test will apply.

Overall I think it is obvious Minister of Finance is looking for funds to close the budget gap. But I would point towards other direction –

Real estate and construction industry. Contractors collect cash for every job done to private consumer, no sane person wants to pay HST on renovation done, be it new floor, tiles or painting. No to mention all this cash is undeclared on income tax returns of those contractors.

This is just the top of underground economy. Add undeclared rental income, property flippers etc. and you can work for cash all year. And collect EI & child benefits. Great, right?

#17 Kim on 07.30.17 at 2:53 pm

“This resonates with T2’s Millennial voter base, since the moisters today seem over-educated, late-maturing, helicoptered, under-employed and non-entrepreneurial, while believing in fictions like a shared economy. Overwhelmingly, the young have become risk-averse.”

Ugh. Are you sure you couldn’t have built a bigger straw-man?

After that little bit of whining about the young, this entire article is nothing but ‘old man yells at cloud’.

#18 Double CPP on 07.30.17 at 2:58 pm

Anywhere in that document mention the self employed no longer being required to pay double the CPP vs everyone else (i.e. both the employer and the employee portion)?
I’m getting dinged close to $3K/yr more than a salaried employee, in that I have to pay both portions.

If this is about fairness, scrap the x2 CPP contribution the self employed need to pay. It’s not like we get double the payout when we retire. We get the same amount as everyone else.

#19 RE Wins Again on 07.30.17 at 3:00 pm

So as T2 heads down the path of changing the tax structure or increasing taxes on every type of ‘investment income’, he leaves the golden goose of capital gains on housing untouched. The amount of revenue you could gain from taxing housing while shutting down speculation is unreal.

Once again, those you invested in RE are the real winners.

Looks like there is now no other choice but to invest in RE – it is the untouchable investment!

Good thing those prudent saves get dinged in portfolios and the risk takers that make capital productive get dinged.

#20 A Dollar is a Dollar is a Dollar on 07.30.17 at 3:06 pm

Sounds like this government is on the right track. It will take a lot to correct past unfairness, but I and most Canadians will trust them on this.

#21 Stan Broock on 07.30.17 at 3:14 pm

#19 RE Wins Again on 07.30.17 at 3:00 pm
So as T2 heads down the path of changing the tax structure or increasing taxes on every type of ‘investment income’, he leaves the golden goose of capital gains on housing untouched. The amount of revenue you could gain from taxing housing while shutting down speculation is unreal.

Once again, those you invested in RE are the real winners.

Looks like there is now no other choice but to invest in RE – it is the untouchable investment!

Good thing those prudent saves get dinged in portfolios and the risk takers that make capital productive get dinged.

———————————-
This is exactly like the owner of a donkey who thought it not to eat. To save on expenses/hey. Initially he was happy, eventually the donkey died.

There can be no economy without savings, investment and entrepreneurship.

Housing is consumption, unproductive expense, there can be no economy without somebody actually producing something.

The geniuses riling us will soon kill the goose that lays golden eggs.

So we will get tungsten eggs. Some weight but not that shiny.

#22 Zed in Geneva on 07.30.17 at 3:17 pm

I hope that in taxing differently the sexes due to different challenges, the federal government will adapt the payouts for OAS and CPP for the expected life spans. Fairness means fair. Me, as a man, cannot in fairness pay more and receive less. That would not be fair!

#23 cmccullo on 07.30.17 at 3:18 pm

OK, I understand that folks are worried about the tax man. Let us all be vigilant, by all means. Still, may we vote that the next dog who compares us to Venezuela be shipped there for a few months of reality reprogramming? Let’s not lose our minds here, people.

#24 cecilhenry on 07.30.17 at 3:19 pm

What T2 and these socialists don’t realize is what this means for society:

Ethics are done. They. Are. Done.

When you push the button on the machinery of state violence, why do you not realize this is a personal moral choice? There is no ‘government’, it is a fiction. Government is a set of people with its hands on the levers of an amoral but obedient weaponized bureaucracy.

Their insistence on NOT allowing consent–in taxation, education, free speech, immigration, freedom of association, and private property is an admission.

A serf paid 10% in taxes– and Canadians pay 50%.

THERE IS NO ETHICS justified for this.

The business of socialism: redistributing resources from those who produce to those who take, vote or destroy.

Fleecing the productive is a sure way to make the productive disappear or at least foster the parasitic mindset to steal, lie, coerce and destroy. Taxed on the money you earn, then taxed on savings, taxed on investments, taxed on tax.

ITs theft— all the while pretending there’s no gun in the room to take it.

THERE IS.

No majority can vote away a man’s life, his property, his labour.

Why work??? Its suports this theft. Instead, how can I be destructive? What can I do to bring this parasitism DOWN??

Do NOT be responsible, sacrificing, productive, polite, moral, future oriented, wise, patient.

That is what the parasite needs to thrive. NO MORE

#25 Blobby on 07.30.17 at 3:26 pm

I keep money in business for years business doesn’t do so well, I can still pay myself.

Sounds like with this scheme, I’ll be taxed full whack when it goes into business. Then taxed again when I pay myself? So that means I pay double tax?

How is that right?

#26 Stan Broock on 07.30.17 at 3:27 pm

#15 SoggyShorts on 07.30.17 at 2:42 pm
If I’ve been paying myself dividends and investing leftovers within the company should I pull more out this year? Should I switch to salary for next year?

I chose dividends because I didn’t want to pay double CPP, but now with years of zero contribution won’t my CPP checks suck if I ever do get them?

———————————

That is interesting question, pretty much a deal breaker for this idiotic legislation driven by morons, the village idiots.

So they state that the income after taxes from a private corporation is pretty much employment income.

Why the heck then would the owners of private corporations who work there have to pay double CPP on their salaried earnings?

Hello, Bill, T2 any opinion on the topic? Or that is too complex for you empty heads?

#27 Ace Goodheart on 07.30.17 at 3:28 pm

Makes me happy I already made my money. What is thus different tax for men and women thing? My wife and I jointly own a bunch of rental properties that we plan to sell in around 2021.

If she is going to pay less tax than me, we should probably make her the sole owner, No?

#28 Ace Goodheart on 07.30.17 at 3:31 pm

Oh and just for fun (let the flames fly from the liberal left, I have my flack jacket on), how bout I transition from male to female, for tax purposes, and then become a lesbian?

Yes I still like sn#$ch but I’m a girl now. I identify with female. And I’m a lesbian. So I like girls.

Think it would work?

#29 Entrepreneur on 07.30.17 at 3:41 pm

That picture of T2 looks fake as his body looks slender unless he has lost some weight. I really think that T2 wants to be a movie star. Maybe he is practicing on us Canadians to see how far he can go without smirking behind our backs.

I have to agree with #1 Paul about the underground market and #8 Keith in Calgary “Wipe out all deductions” on income tax. Operating a small business is hard and is harder in today’s market/economy. As small business is the engine of the economy they should get the utmost respect in opportunities to advance. (But, has that all changed with global trade for cheaper products and services? And, unfortunately, we all suffer from this bias-trade thinking, nationally and environmentally.)

As someone mentioned “We reap what we sow” and so true.

#30 No Canada, No on 07.30.17 at 3:44 pm

Interesting view.

Why does Canada seek to encourage risk-averse behaviors for entrepreneurs? While making sure (via interest rates and backstopping mortgages for the banks) the population is buried in epic real-estate debts?

Such system is probably going to slow down innovation and seeding new small businesses, that supposed to be locomotives of economy tomorrow. Not to mention is a direct invitation to start looking South.

It doesn’t make much sense. I wonder if there is any research on tax optimization schemes having any adverse effects on the economy?

#31 BC_Doc on 07.30.17 at 4:01 pm

Canada was happy to allow US corporations to “invert” and morph into Canadian companies (eg, Burger King and Tim Hortons). The US corps were of course motivated by a quest for lower corporate taxes.

I am a Canadian who was born elsewhere. Due to my place of birth, I have a right to citizenship in the land to our south. I am also an Irish citizen. Depending on how the cards fall later this year, my professional corporation may explore moving its domicile to a location where its retained earnings will receive more favourable tax treatment. Thanks to hard work and saving and investing aggressively through the Great Recession, I recently reached my magic retirement number. While I like what I do professionally, I no longer need to work full-time, though I choose to do so. If I had to walk away or wanted to reduce my hours, I could do so.

Marceau and Trudeau need to beware of the unintended consequences of their proposal– unintended consequences may come back to bite them.

#32 X on 07.30.17 at 4:09 pm

I don’t think that we will have a mass exodus of MD’s to the US. I do think that new grads will be more likely to leave. Less ties here, great opportunities in the US, and less taxes.

I do think that the proposed changes will effect the entrepreneurial mind set. Not in the way that a revenue driven, tax collecting government would want.

I do think that the proposed changes will cause fees to rise. Sure it is pitched in the name of fairness. But the average guy ends up with less at the end of the month after he pays for his duct cleaning, filling, blueprints, dry cleaning etc…

As someone who uses a PC, I have never paid a cent to my spouse or a family member. Investing money in the PC does allow me to save faster for new equipment.

In the name of fairness why doesn’t T2 or Morneau make personal income tax rates the same for everyone. That would be fair. Some already pay more than their fair share. I mean if it were the same personal tax rate, if I made more I would end up paying more anyways. Why should I pay at higher rate in personal taxes towards my child’s teachers salary, than the parents of other students.

The American Dream is supposed to be that you work more, and are able to make more, regardless of occupation. Welcome to Canada, where you have no incentive to put in overtime, start a business, or financially get ahead in life.

#33 Dan on 07.30.17 at 4:19 pm

Give me a break, if dr Justin is a socialist what the hell you are? Fascists? Like your old folks coming after WWII, because Canada needed skilled workers? Skilled in what?

#34 fred graves on 07.30.17 at 4:24 pm

Garth-

Today’s above captioned article Risk and Reward (for some reason dated July 29th) again shows your grasp of human nature and economics: the small, timid, selfish minds captivated with equally dividing a shrinking pie whilst wanting to penalize risk takers trying to produce a bigger one. You are right, it won’t work, never has. Well written.
Fred Graves

#35 Dave on 07.30.17 at 4:26 pm

Finally, a progressive move by the Liberals. Now the rich will pay taxes like everyone else. No one seems to do do much for the retail workers, receptionists, truck drivers, clerks, etc. I’m sure most doctors, lawyers, and bankers are still way further ahead with any tax increases.

#36 Stan Broock on 07.30.17 at 4:29 pm

#24 cecilhenry on 07.30.17 at 3:19 pm

Any expectation for fairness or moral in the current environment is wrong, it is suicidal and irresponsible to your kids.

Don’t be confused, Canada has no socialism, Europe is socialist. We have Kleptocracy and oligopolies, the real owners of this place.

The rest is a charade, the equivalent of the happy ‘free run’ chicken headed for slaughter.

#37 Dave on 07.30.17 at 4:29 pm

There are plenty of doctors who want to move here from other countries–plenty. If the medical association wouldn’t make it so difficult for them to get in maybe the wait times would go down. Any doctor that moves to the states to make more money, when they already make more than 90 percent of the population should go, if that is what motivates them most in life.

#38 Debtslavecreator on 07.30.17 at 4:33 pm

What did you expect from a Castro loving and China government adoring Trust fund baby ?
This is nothing yet folks
As the final effects of the greatest debt bubble wear off on this corrupt neoliberal hellhole you will see a sudden economic recession and by next spring forward guidance from Poloz will be followed by dropping the overnight rate to 0 and QE to buy MBS in s desperate bid to maintain the illusion of wealth in Canadstan
Then when the loonie dives to .55-.60 and stocks /RE “go up” True-dough and Billy will increase capital gains tax to 90% because it’s fair and apply 100% tax to the big gains in your TFSA and RRSP
Whatever you have left will be used to pay 5-600/ week for a few cans is Spam and fruit at no frills and your property tax bill that had doubled
We all know how left wing brain disease ends

#39 sunshine on 07.30.17 at 4:38 pm

This may or may not be good policy, but crying about a 300K debt when the average specialist makes more than that easy in a year is hardly a grand hardship, and the fact that less than 5% of those that apply get into medical school suggests that we dont have a shortage of people interested in becoming doctors… also given the ethnic backgrounds of many of the younger doctors we graduate in this country its hard to imagine that many will be lining up to move to the states. Doctors have an important role to play in our society, and they should be well compensated, but suggesting that changing the rules of incorporation will somehow reduce the number of people interested in joining the profession, send them to the poorhouse, or result in a mass exodus to the states is hyperbolic.

#40 Bob on 07.30.17 at 4:39 pm

Garth,

You old fart….please run for Parliament again…

…just one more time.

#41 Another Deckchair on 07.30.17 at 4:44 pm

Hmmm, if women get taxed more fairly, wonder if more will self identify as female?

#42 Another Deckchair on 07.30.17 at 4:45 pm

Hmmm, May be time to start self identifying as a female… ;-)

#43 Bob on 07.30.17 at 4:47 pm

I just don’t recognize this country anymore. How astonishingly fast it has gone from a people who were confident about the future with a can-do attitude to a bunch of rent seeking whiners and complainers.

I’m not wealthy…certainly wish I was…but that does not mean I wish to take away another person’s success in life who made better decisions and choices. That would be true unfairness on both a personal and moral level.

Nothing in this world is worth having if you have not earned it…have we stopped teaching that to our children???

#44 Repugnant Decadence. on 07.30.17 at 4:55 pm

gotta pay for all those baby boomers lifestyle somehow

#45 jess on 07.30.17 at 5:07 pm

adverse scheme enablers

KPMG, PCAOB dismiss personnel over inspection leak
PCAOB enforcement actions include sanctions against audit firm leaders in Deloitte Brazil and Deloitte Mexico for lying to PCAOB inspectors and falsifying audit documentation to obstruct investigations.
…WSJ reported that a PCAOB professional had given inspection information to a KPMG staff member and firm leaders used the information to potentially cheat on future reviews.
==================
…” failed in the following respects to obtain sufficient appropriate audit evidence to support its audit
opinions on the financial statements and on the effectiveness of ICFR –
PCAOB Release No. 104-2015-189 Inspection of KPMG LLP October 15, 2015
https://pcaobus.org/Inspections/Reports/Documents/2015-KPMG.pdf
see page 62 letter signed by scott marcello vice chair

http://retheauditors.com/2017/04/17/kpmg-takes-its-turn-with-a-big-4-sized-scandal/

Tammy Whitehouse | April 11, 2017
https://www.complianceweek.com/blogs/accounting-auditing-update/kpmg-pcaob-dismiss-personnel-over-inspection-leak#.WPQt7hxNJe8
https://www.complianceweek.com/blogs/accounting-auditing-update/kpmgs-latest-inspection-shows-more-modest-improvement#.WO3–hIrLVo

=========
deferrals
motivation for whistleblowing and why this PHD in mathematics rejected qui tam award
…”GR: Your whistleblowing was conducted under the program for incentivizing whistleblowers that was introduced in the Dodd-Frank act. Would you have done it without Dodd‑Frank?
EBA: I believe that I would have done it without Dodd‑Frank, but I believe that I would not have been successful in making my case and pushing the SEC to pursue it. I think the fact that ultimately there was some enforcement action and an acknowledgment that we were correct was certainly a direct result of Dodd‑Frank.
GR: This is because the Dodd‑Frank whistleblower program allowed you to hire a lot of expensive experts?
EBA: Yes, experts, lawyers, etc.

https://promarket.org/sec-revolving-doors-qa-eric-ben-artzi-12-billion-dollar-deutsche-whistleblower/

#46 Cow Man on 07.30.17 at 5:08 pm

Sir Garth:

This only goes to prove that everyone’s goal should be to work for a government body (bureaucrat, teacher, fire fighter, police person etc.). It seems we are all now working for the governments’ benefit not our own; just some of us do not yet realize it. The big hit will be when the personal corporation owner tries to get his/her passive investment income out of the corporation. The tax rate on dividends from a Canadian Corporation is calculated on a 125% gross value rate. Good luck to us all.

#47 Howard on 07.30.17 at 5:10 pm

#9 Lee on 07.30.17 at 2:21 pm
I heard too that JT wants to reduce taxes on single moms and women the year and year after they have a child. Doesn’t sound like a crazy plan.

———————————-

Reduced taxes for failing to use birth control?

And would this apply to single dads as well or has Canada truly become a matriarchy with men simultaneously expected to be the bread-winners (women do not marry men who earn less than they do) yet servile?

#48 Howard on 07.30.17 at 5:12 pm

T2 gets a pass because he’s too dumb to understand any of it.

Morneau is the real threat to Canadian achievers.

#49 Zen on 07.30.17 at 5:15 pm

Are you serious? Different taxes for men and women? Against the law – sexual discrimination.

#50 Trust Fund Baby on 07.30.17 at 5:19 pm

Why doesn’t the Finance Minister who inherited his family’s business ask J. Trudeau if he feels guilty for having been a trust fund baby and having inherited a whack of dough from Daddy (T1)? I think the answer is “yes” and if so, T2 should give away all that $$ to charity and then start from scratch instead of ruining things for other Canadians! As well, why isn’t family / individual taxation treated the same way as we treat taxation for corporations, ie, if there’s money remaining (aka profit) after the expenses (aka cost of living) are deduced from your total revenue (aka annual income), then you’d pay tax accordingly? What’s the true value difference between a ” family enterprise” and a “business enterprise? Can someone explain this?

#51 TheSpangler on 07.30.17 at 5:19 pm

If they want more taxes, why don’t they just tinker with the principal residence exemption. Throw that on the chopping block, treat houses just like all other capital assets.

#52 Winning the Hearts and Minds on 07.30.17 at 5:20 pm

In one respect, the T2 government and the YUUGE Trumphalump share one attribute: both had to win the hearts and minds of a chunk of the electorate.

The chunkies are now looking for payback. Trumpo-dumpo has used Twitter quite effectively to circumvent all the sane people who would normally present a balanced view of the circus in Washington. Confusion reigns supreme and America has lost its way. Similarly, the T2 supporters want (as our esteemed and manly blog host, he of the sculpted abs and wavy locks — obligatory suck up inserted here — has so clearly stated) to feel that they are going to be taken care of and boy, are they going to be taken at the very least. A scary ride is ahead as no amount of skinned doctor hides will be enough to satiate the greed for more revenue the Feds are going to need in the future.

By identifying the incorporated and subtly casting them as being advantaged to the detriment of said chunkies (and it is no accident that this rhymes with monkeys), any move by the T2 government to milk said business owners, to right the perceived wrongs, will be accepted as necessary and prudent by the unwashed masses of indebted wage slaves (or scum as I like to think of them).

I am winding down my corporation this year; while never more than a modest one man show, my corporation presented certain advantages to me which will effectively disappear with the coming changes that Garth has outlined. I will now transition into retirement, collect all the bloody benefits I am promised, and the devil take the taxman.

#53 Millennial Investor on 07.30.17 at 5:23 pm

I can appreciate providing tax breaks for small business that create jobs, but becoming an MD, billing OHIP and ‘hiring’ your extended family does not equal entrepreneurship.

To all of the whiny old doctors…please, do us a favor and move to the US already. Pay the ridiculous malpractice insurance rates, live in fear of litigation and deal with the realities of the free market. There will be many recent and foreign grads lining up to take your place :)

#54 good luck with that.. on 07.30.17 at 5:23 pm

my professional corporation may explore moving its domicile to a location where its retained earnings will receive more favourable tax treatment

…………

do pray tell where you plan on moving this? US? um, take your calculator aint going to work if you plan on living IN Canada.

no place to hide. T2 likes you, why try to hide?

#55 GTA Engineer on 07.30.17 at 5:24 pm

Pardon my inability to see the pain in your plight here Garth. Higher risks are already compensated for via higher rewards. Why should reduced taxes be required as an additional sweetener? Keep in mind these changes are to reduce things like allocating your kids silly salaries for doing menial work to reduce your tax burden. Similarly, don’t cry about the lack of pension plan – if you’d like one, just have the personal corp pay you a salary and you can then open your own RSP. The majority of this country does not have pension plans so don’t compare personal corporations to professional jobs with pension benefits – compare them to the mean (no pension benefits). Make things equal – the rich got rich from taking on risk – they got their piece of the pie. Now they need to pay their fair share as well.

#56 joblo on 07.30.17 at 5:41 pm

An aging bankrupt country whose government’s socialized medical care for wrinkles (who have no savings but a big house) will only further drain finances.

Are these the votes the Lieberals desire?
Not a strategy for long term success IMV.

Their Socialism needs the “over-educated, late-maturing, helicoptered, under-employed and non-entrepreneurial, while believing in fictions like a shared economy.”

Whatta ya gonna do?

#57 Damifino on 07.30.17 at 5:44 pm

#20 A Dollar is a Dollar is a Dollar

Nice to have you back, Komrade. Just wondering…

Will you be investing any of your after-tax income creating a business or employing anyone in the near future?

#58 Inflated? on 07.30.17 at 5:46 pm

As a small business owner, if my costs increase for any reason (ie: increased taxes) I have only one recourse – raise my rates.

My understanding is about 70% of Canadians own or work for a small business. It would therefore appear to me that this tax increase is more about kick starting inflation, then increased tax collection. Our large boomer population means we can’t seem to get the economy going through increased consumption.

The medical community has already stated that these new taxes will be taken into consideration when they negotiate new rates for Drs in Canada. Why wouldn’t the rest of us also take them into consideration when we set our rates next year for our excavator or plumbing services?

Any feedback?

#59 young & foolish on 07.30.17 at 5:50 pm

“If she is going to pay less tax than me, we should probably make her the sole owner, No?”

Changing ownership will trigger capital gains and land transfer taxes … calculated based MPC market values.

#60 Prol on 07.30.17 at 5:51 pm

The rewards for risk are higher incomes and a longer/higher standard of living, not tax dodges. Pay your taxes

#61 MSM-Free Zone on 07.30.17 at 5:57 pm

Let me get this right.

Income Sprinklers pleading for pity, all the while telling Millennials to suck it up.

That’s rich, really rich. Welcome back to the 60’s and pass the popcorn.

#62 Izzo on 07.30.17 at 5:57 pm

The irony of this whole article is that the idea of risk is relative. I love the tidbit about Doctors taking risk. Are you joking???? There is no risk in being a doctor or a dentist as that is a guaranteed ticket to the good life. So when you tell me these guys should be taxed at a lower rate then a salaried employee who has no pension and no job security and makes a pittance because the boss wants to squeeze them like a bad pimple, I have to question your perspective. Nevermind the fact that these corporations can be used to write off cars, phones, internet and a whole bunch of other things that salaried employees use and pay full price for.

I understand some people take risks and there should be a certain amount of leeway to allow them to thrive but not everyone should be given a free ride on the backs of the common person. You should take a step back from the abyss of self entitlement…

#63 Marcus on 07.30.17 at 6:09 pm

If there is going to be a single males only tax you can say goodbye to Canada. MGTOW, Men Going Their Own Way is growing world wide already due to the lousy legal sttus for men who get divorced. (ie lose their kids, their house and 20 years of their income) If they add a targeted single male tax you may get thousands upon thousands of young men declaring on their taxes that they are Non Binary cucumbers to escape the single male target on their backside. Oh Canada!

#64 Millennial905er on 07.30.17 at 6:14 pm

“Finally, the government is studying differing taxes for men and women.

Seriously. More tomorrow.”

#6 Jason:
As a female this is scary!!!

Here’s the key: This government doesn’t believe in gender (T2 doesn’t believe in nationhood either*… noticing a theme?). As such, I’d advise that you reclassify yourself as an Postmodern postgender Elf and hope for the best.

*https://www.google.ca/amp/s/amp.theguardian.com/world/2017/jan/04/the-canada-experiment-is-this-the-worlds-first-postnational-country

P.S. the theme is anything that differentiates traditional Western civilians

#65 Winter is Coming on 07.30.17 at 6:17 pm

Behavioural change indeed.

Having had time to ponder the pending legislation since our illustrious Finance Minister held his press conference last week, one has to think that the very essence of free enterprise in Canada will change significantly.

Where as the media loves to point to doctors or other ‘highly paid’ professionals no longer getting certain ‘perks’, this transcends the closure of a few loopholes. This is the removal of any incentive to hustle. At least as it applies to private corporations.

Garth, would you have taken the personal initiative, capital, headaches and time to open your store under the proposed legislation? Yeah…didn’t think so.

So now, having gone through the stages of grief, I am resigned to the inevitable and have my plan in place. Believe me, that plan does NOT include working harder for our current bunch of overlords, or to shoulder an even greater share of the burden that they would place on me.

Go ahead Mr. Trudeau and Mr. Morneau. Pull the Trigger! I dare you. Light the Match!

How breathtakingly dull can we all be to think that there will be no repercussions? That those of us who have saved and invested and planned and built within the private sector won’t be equally nimble to change track or spool things down if need be?

Fair share? You bet. Bring it.

#66 crowdedelevatorfartz on 07.30.17 at 6:20 pm

@#28 Ace Goodheart
“Think it would work?”
*******
Possibly.
But only if you legally changed your name to Grace

#67 WUL on 07.30.17 at 6:24 pm

Doctors in Canada never have to write off a receivable. Payment is certain, timely, regular and in full. We should all be so lucky to face such “risk”.

#68 Smoking Man on 07.30.17 at 6:24 pm

I have a legal work around how you can protect the loot in your corp, I will share when this shit becomes law. Don’t want to give the Commies a heads up.

#69 crowdedelevatorfartz on 07.30.17 at 6:26 pm

@#39 Repugnant Decadence
“gotta pay for all those baby boomers lifestyle somehow’
********
Yeah my life is soooooo decadent.
Ikea furniture, a hideabed/couch from The Brick and milk crates for bookshelves.
Repugnant yes, but if this is decadence, whats a basement dwelling, teat sucking millenial to strive for?

#70 In the cold on 07.30.17 at 6:28 pm

Double CPP: you don’t understand the way CPP was designed: both the employer and the employee pay into the CPP, when you run your own business as the employer you have to pay the CPP for every one of your employees; as the employee you have to pay your own share as well.

To illustrate this point better imagine that you ran a company with 10 employees, in this case you will pay the employer part of the CPP for all 10 employees but you would only pay the employee party for yourself.

Hope this makes things clearer.

Your predicament is a direct consequence of your being an entrepreneur. On the plus side, you get to enjoy all profits created by the company… something that a regular guy working for someone else cannot even dream of.

#71 akashic record on 07.30.17 at 6:32 pm

Vancouver and Toronto is now an example for a new petition for taxing foreign buyers in California by Sam Altman, the 32-year-old president of Y Combinator, the most prestigious startup accelerator in Silicon Valley.

Altman has political ambitions to change society by “re-writing the social contract”, which would include providing free housing, built by robots, single-payer healthcare, clean energy, skills-based education, and rewriting tax codes that favor the middle class.

http://www.businessinsider.com/sam-altman-mission-fix-american-democracy-2017-6

Petition for a Foreign Buyers Tax

http://unitedslate.samaltman.com/

We have a big housing problem in California and I’d like to explore running a ballot initiative in 2018 that will help alleviate this crisis. Over the next four weeks I’m going to propose policies that I think could help.

There is a housing crisis in California. The median home cost is now over $500,000, which is twice the national cost. Over the last five years, housing prices in Los Angeles, San Francisco, San Jose and San Diego have increased as much as 75 percent. I’m tired of seeing my friends leave the state because they can’t afford a place to live.

In recent years in the US, we’ve seen huge uptick in foreign buyers buying property they aren’t even living in, often as a way to buy a tax-favored asset in US dollars. Last year, foreign buyers bought $150 billion of US property.

A lot of these buyers are using these houses as investments they plan to live in a small part of the time or not at all, and I think that’s bad for Americans. I believe that housing should be used primarily as a way for people to live, not a way to make money.

California has been hit extremely hard, and this is pushing up prices dramatically for Californians looking for a place to live. I walk by many new condo buildings in San Francisco that are dark at night. I think we should introduce a new tax on foreign buyers (specifically, anyone who is not a citizen, green card, or long-term visa holder) of real estate in California–I think we want people buying houses that are able to and plan to live in them for the long-term. A tax here will both reduce demand and generate new revenue.

Vancouver and Toronto have implemented policies like this with impressive results. According to the Real Estate Board of Greater Vancouver average home prices fell by 16% after the tax was implemented. Prices in Toronto have already fallen 12% from their peak since a foreign buyers tax was implemented there.

#72 BoomerKid on 07.30.17 at 6:35 pm

#34, #48.

What do you think these “rich” doctors actually make?

I’m a highly specialized physician near the end of my training and will become a fully-fledged physician at the age of 35. This is what my situation will look like.

Assets: None
Debt: $250,000

Billings: $300,000
Overhead (30%): $90,000
Gross income: $210,000
Income tax: $78,380
Net income: $131,620
Debt repayment (2.95% amortized over 10 years, likely underestimated due to interest rate increases): $28,872/yr
Retirement savings in order to accumulate a “pension” equivalent to $76,000/yr (median income in Canada) by 65 assuming 6% rate of return and 4% withdrawal rate: $21,500/yr

Take-home income after debt repayment and retirement savings: $81,248.

This isn’t bad. But it’s a decidedly middle class lifestyle.

It’s equivalent to someone who makes a gross income of $76,000 per year (40 hours/weeks) with pension and 2 weeks of vacation who works 13.5 hours/week of overtime at 1.5x the pay rate.

Except that I will start at age 35, have worked 1 in 4 nights in the hospital and 2 weekends a month plus about a third of the stat holidays for the last 5 years and will continue to work nights, weekends, and holidays for the rest of my working life.

And I will have no benefits – which means that if I take maternity leave (I’m female), then I’ll be paying for the time out-of-pocket while still paying overhead (like any other business owner). This is why most of my female colleagues take around 3 months for maternity leave, substantially less than the standard 6 months for employees.

Most physicians did not go into medicine for the money, but the government and the general public’s attitude towards doctors is a real source of frustration and burn-out that makes many choose to cut back hours or leave the profession altogether.

#73 SoggyShorts on 07.30.17 at 6:45 pm

#50 GTA Engineer on 07.30.17 at 5:24 pm
Make things equal – the rich got rich from taking on risk – they got their piece of the pie. Now they need to pay their fair share as well.
———————————-
Not all small business owners are rich. The first couple years I made zero money, and the next couple my employees made more than I did working half the hours.
I get no overtime, no EI, no vacation pay.
I understand closing the loophole of income sprinkling to your kids as that seems like an obvious cheat, but keeping some money in the company to fund my retirement (where I won’t be getting normal sized CPP checks if at all) How about you leave us a little something to make it worth doing?

#74 ImGonnaBeSick on 07.30.17 at 6:49 pm

More taxes… always more taxes. Why are we cheering for ways to drum up a few hundred million, when we should really look at how to cut out billions in spending? Stop giving this government an open cheque book…

#75 akashic record on 07.30.17 at 6:50 pm

Work for the UN: you are exempt to pay income tax.

#76 ImGonnaBeSick on 07.30.17 at 6:54 pm

Also, #50 GTA Engineer, you’re obviously an idiot. Higher risks do not guarantee higher rewards, more often than not, it’s the opposite. Absolutely small business owners deserve incentive, and the only thing a government can offer is a tax break.

#77 Venza on 07.30.17 at 6:57 pm

Carlos better not be white

#78 Lee on 07.30.17 at 7:01 pm

#52 Howard,

Yup.

#79 Spectacle on 07.30.17 at 7:18 pm

Does it disturb anyone else that larger risks to western civilization, working canadians, small business has/is been actively pushed upon us all?

Agenda 30 is setting up plans to actively destroy:
: the middle class,
: the educated professionals,
: the entrepreneurs,
: and structure of our nation by an agenda hiding in plain sight!

Isn’t that treason by our government officials? Zero hedge is just the first of many links::

U.N. Official Admits Global Warming Agenda Is Really About Destroying Capitalism | Zero Hedge

#80 domain on 07.30.17 at 7:28 pm

#50 GTA Engineer
“Make things equal – the rich got rich from taking on risk – they got their piece of the pie. Now they need to pay their fair share as well.”

Make things equal? Good idea. Let me know when the tax system is equal where everyone pays the same rate, because last I checked, 50% tax vs. lower tax rates for lower earners doesn’t compute as ‘fair’ for me.

By the way, I almost puke every time I hear some loser use the pathetic “fair share” in any sentence. When I hear that phrase, I immediately picture some diaper wearing adult infant having a tantrum because someone else got something they didn’t. The other visualization I get is a low paid engineer unhappy about their compensation, and letting their envy rule their minds.

People ought to pick up some books and read about how the Bolshevik revolution played out for the Communists, which more and more people like yourself are starting to sound like.

And the moment you completely abandon property rights, which is the road we are already well down, is the moment that everyone gets to enjoy a future of declining living standards. So watch what you ask for.

#81 Wait There on 07.30.17 at 7:39 pm

Ever wonder why banks do not like to loan money to small business? They know the risks about the percentage which will be able to repay. That should tell you everything about small business and the challenges they face.

This paper reeks of class warfare! In this warfare scenario, one side might have won one battle at first, but there is no doubt who will eventually lose the war.

#82 DD on 07.30.17 at 7:43 pm

If every small business owner (including incorporate medical professionals) and their partners that voted Liberal last election now chose not to this time, it could cost them up to 3-4% of popular vote. Not chump change.
#what is T2 smoking?

#83 Nick on 07.30.17 at 7:55 pm

I don’t get it. So the gov’t is after “income sprinkling”. This means that if I have a corporation which my family members are shareholders, I can’t pay them dividends now? So how is that any different if I were to buy my kids dividend paying stocks? Is that illegal now too?

WTF is wrong with this government penalizing people for financial prudence? I can’t hedge my business income against future slow years? Should I just go into massive debt like the unwashed financial illiterate and spend spend spend? Oh wait; that’s what T2 is doing. If you can’t best ’em, join ’em is guess.

#84 Spectacle on 07.30.17 at 7:59 pm

” Risk /Reward ”

Just to add to the point, the Agenda planned for those who historically build wealth and sustain our nation and Canadian way of life, is all changing ( being destroyed ) . They have already come for us….and as Mr Turner pointed out since last year, it’s too late.

I closed one company of mine down last year. It takes a while to do that ( paperwork etc). Painful, but the govt was going to set my rewards up in flames , and it wasn’t worth the risk. Painfull experience, but essential?

07 Agenda 21 :: Dr. Rima Truth Reports

#85 SoggyShorts on 07.30.17 at 7:59 pm

#70 In the cold on 07.30.17 at 6:28 pm
Double CPP: you don’t understand the way CPP was designed: both the employer and the employee pay into the CPP, when you run your own business as the employer you have to pay the CPP for every one of your employees; as the employee you have to pay your own share as well.

To illustrate this point better imagine that you ran a company with 10 employees, in this case you will pay the employer part of the CPP for all 10 employees but you would only pay the employee party for yourself.

Hope this makes things clearer.

Your predicament is a direct consequence of your being an entrepreneur. On the plus side, you get to enjoy all profits created by the company… something that a regular guy working for someone else cannot even dream of.
———————————————-
I understand exactly how it works, and if I pay myself a salary instead of dividends, I (the employee) pay CPP and I (the employer) pay CPP as well. That’s double CPP.

Can a regular guy working for someone else also dream of spending years with no income starting up a company?

I’d really like to separate small business owners from doctors and other CCPC that really only have 1 person in them+ sprinkles.

The bottom line is I and many other small business owners I know are on the fence with “If I could do it over again, would I?” and that is before any of these proposed changes came up.
I’m never more than a few steps from selling my client list, laying everyone off and taking a job with one of my bigger clients.

Now I’m dreaming of all the business headaches being someone else’s problem. Imagining leaving work at work and not thinking about it again until I get back. That’s something business owners can only dream of.

#86 Nick on 07.30.17 at 8:00 pm

#50: GTA Engineer

“Make things equal – the rich got rich from taking on risk – they got their piece of the pie. Now they need to pay their fair share as well.”

Three pieces of advice: 1) Move out of the GTA; it’s making you crusty. 2) Change professions. As an Engineer myself there is no money in Engineering thanks to the massive incompetence that is the PEO. They didn’t fight for the status of our professions like the doctors and lawyers did. 3) if you want to make it; start your own company; put it all on the line and pray that you can get your piece of the pie so you can pay your fair share too.

Try financial advising.

#87 the problem.. on 07.30.17 at 8:03 pm

There are plenty of doctors who want to move here from other countries–plenty. If the medical association wouldn’t make it so difficult for them to get in maybe the wait times would go down. Any doctor that moves to the states to make more money, when they already make more than 90 percent of the population should go, if that is what motivates them most in life.
……………

is specialists. Rather, lack thereof. We have a shortage. It will get worse, as they stand to gain a significant more by moving south of the border. Waiting times will be longer, this you can bank.

And money ‘motivates’ them? Please….that insult won’t make anyone blink

#88 Freedom First on 07.30.17 at 8:07 pm

I have been fortunate and blessed in my life to have traveled a great deal, sky dive, ride in a hot air balloon, para-sail, become an expert skier, go white water rafting, view the Caribbean reefs, win trophies in 3 different sports as an adult, and all while living a freedom first risk-free lifestyle.

Humbly yours,

Freedom First
Master of Freedomonics
Its my life

#89 FOUR FINGERS WATSON on 07.30.17 at 8:08 pm

T2 didn’t get elected on his qualifications, he was just the empty suit standing there when Harpo got thrown out. Didn’t hurt that his name was Trudeau and he has better hair than Harpo. If you voted for the empty suit…..Bwahahahaha, the joke is on you. You got what u deserved and u get two more years of it. He’s just getting started. And he will get elected again by playing the political race, gender, tax, and pot cards. Hahaha. Suckahs.

#90 Silent the people on 07.30.17 at 8:10 pm

I say make the tax system simple! No avoidance, exemption or off-shore! 15% tax to everyone regardless of your situation, risk of investment! As Canadians we should be proud to contribute to our country to make it fair for everyone! KPMG should be ashamed of what they have done….

#91 Spectacle on 07.30.17 at 8:12 pm

Missing link, or copy and paste:

https://www.iceagenow.info › u-n-officia…

Hope this one works. Some highly intelligent authorities propose that The “agenda , sustainability, gender neutral, equality” crap is being used against you.

#92 Sydneysider on 07.30.17 at 8:13 pm

#72 BoomerKid

“Take-home income after debt repayment and retirement savings: $81,248.”

You should only deduct the debt interest, and none of the retirement savings to give a true picture of the assets that have passed into your hands.

#93 Mike on 07.30.17 at 8:14 pm

Either let wage earners split income up to $50,000 or pass these proposals.

T2 has my vote if he passes this. Fairness.

Wanna move south, plenty of immigrants agents there to help you. Thanks!

#94 april on 07.30.17 at 8:16 pm

#40 – Disrespectful.

#95 Wait There on 07.30.17 at 8:22 pm

#73 I’m with you there.
The first 5 years of my business I was below poverty level. I stuck it out and am now one of the leading companies in the world in my business segment.
Did the fair government give me money when I was below poverty level? Did any of the middle class help me? Did they give a “Sh_t” ? No, I don’t think so. Now I employ someone who pays taxes in my Small Business.
And as soon as someone makes it based on hard work sacrifices and risking their entire career, the government wants to take and take and take. The small business tax rules as they are now recognizes these efforts and it is there to help in these situations.
The moisters think that in a sharing economy all the spoils are shared except they don’t want to share in the work and sacrifices.

#96 Robbers on 07.30.17 at 8:23 pm

Theft is when someone takes something that doesn’t belong to them. Either governments own “their people” as slaves, or taxation is theft. You own yourself. Therefore, taxation is theft. Because you own your body, your labor, and what you acquire by trade, taxation is theft.

Adam Kokesh, FREEDOM!

#97 FOUR FINGERS WATSON on 07.30.17 at 8:26 pm

Some of you laughed at Kevin O’Leary. Are you laughing now ?

Quitter. — Garth

#98 Robbers on 07.30.17 at 8:31 pm

You know the price of tea bullshaite as the reason for the antibritish revolt? It was actually taxation. I’m only glad Eau de Turd is hasting the moment more will wake up to the scam and take freedom back.

#99 Leebow on 07.30.17 at 8:31 pm

What are the residents of Delaware called?

#100 Keith on 07.30.17 at 8:33 pm

Socialist Canada; makes me howl. According to Canadian business magazine there are 92 billionaires/billionaire families in Canada. Interestingly, 8 of them hail from Vancouver, a mid sized provincial city, not a financial nor a political centre, known for excellent weed and yoga prowess. Not much of a socialist state for some.

T2 and the self employed, well if you grind the proletariat under the boot long enough, they may lose their voice but they still don’t have any more money. Haven’t seen a rise in pay in real terms since the seventies, but the economy has grown, someone got that cash and the operations of government need to be paid for. He’s taxing where the income is, and thank goodness for that because if he doesn’t he will have to start taxing wealth. You know, the wealth of the little people who made it, or saved their money, or bought a house in Vancouver back in the day, or built a small business worth a million or two. (Don’t forget that 800k capital gains exemption or spread the word shhhhhh).

If the income of the working and middle class is frozen out of the growth in the economy, the government revenue has to come from people who got that cash. It went somewhere. It didn’t disappear. Those who got it, and got most of the money from the tax breaks for forty years, have to pay up. Stop crying, or leave town. But if Jimmy Pattison can accumulate 7 billion + domiciled in Vancouver, tax bite can’t be too bad.

#101 Leebow on 07.30.17 at 8:38 pm

#72 BoomerKid

Wow. I didn’t know. Add to this the limited upside and non-scalability of work.

All of a sudden that doesn’t look like a career option.

#102 crossbordershopper on 07.30.17 at 8:48 pm

DELETED.

I warned you about racist posts disparaging aboriginals. You are no longer welcome here. — Garth

#103 Randy Randerson on 07.30.17 at 8:52 pm

DELETED

#104 Soviet Capitalist on 07.30.17 at 8:53 pm

If this is about making all equal, then why not simply decrease the tax on employees?

#105 Smoking Man on 07.30.17 at 8:55 pm

Sort of homeless now, living in a casino penthouse because my wife has no self-control. The shit you do for love.

Dear Bill Morneau

You pathetic loser, jumping shark cause you’re a shit business man, got into government because you can’t succeed at any thing else that requires execution and a bit of risk and work.

You are happy to punish others that found their way out of the maze.

Now you are aligned with communists thieves that have the state and police guns backing them.

I’m so out of this pathetic country that use to be beautiful. But we elected metal cases because no one is a match to the machine and their take over of education. Basterds that need to speak to the world via their possessions. Not me.

Too late to steal my loot. It’s gonzo. Just like me after a road trip, and an unpaid credit card debt for the car for the road trip.

DM you’re going to get that bill

#106 Randy Randerson on 07.30.17 at 8:57 pm

#83 Nick on 07.30.17 at 7:55 pm

Sorry bud, if you have left over earning from the prior year, the government is tell you to shut your pie hole and give them more tax, even though your post-taxed money is there to hedge any unforeseen financial disaster that might permanently damage your company.

Welcome to voters sanctioned communism, aka Canuckstan.

#107 Randy Randerson on 07.30.17 at 8:58 pm

#63 Marcus on 07.30.17 at 6:09 pm

Good call, since T2 seems so fond of gender neutral language, single men with 6 figures salary will start to “identify” themselves as women.

#108 Randy Randerson on 07.30.17 at 9:00 pm

#58 Inflated? on 07.30.17 at 5:46 pm

I know I’ll be raising my rate soon if this SHTF.

#109 Stone on 07.30.17 at 9:01 pm

Well, read through the proposed changes and overall I don’t take issue with it except for one thing. Taxation by gender. What the…? Would that not be against the constitution? I imagine someone will challenge that in court and it’ll die a quick death.

#110 FOUR FINGERS WATSON on 07.30.17 at 9:07 pm

Some of you laughed at Kevin O’Leary. Are you laughing now ?

Quitter. — Garth
……………………..
He saw the hopelessness and bailed. Why stick around and watch the suicide?

Principal? Conviction? Courage? Pick one. — Garth

#111 Smoking Man on 07.30.17 at 9:09 pm

Short RBC, I’m not coming back to fix broken spread sheet swap prices that TFW and new liberal voters fk up.

Love you Robin and Shriya. But selling Ice cream in a tax-free zone where I can wear flip flops year round.

I’m done here. Let the real sunshine kill my athletic foot fungus.

#112 jay#2 on 07.30.17 at 9:17 pm

Trudeau wants to get the seat on the U.N. and he is aiming for a job for himself at the U.N. as well ,that’s what is behind his government policies .

#113 Pete from St. Cesaire on 07.30.17 at 9:20 pm

If I was a young man just starting out and looking to make my way, I’d be leaving ‘the Western world’. It’s toast, it’s over, it’s done.
The quicker these commies run out of other people’s money to spend….the better.

#114 Andrew Woburn on 07.30.17 at 9:21 pm

Remember when Germany was buried in a million refugees, Europe was collapsing in a welter of recriminations and Life-As-We-Know-It was just about over.

Where are all the refugees now? Why is Merkel still there?

Yet another reminder that media hysteria should always be taken with large pinches of salt. Especially by investors.

“We have only half the number of refugees we originally expected would come,” she told me. “In 2016, the numbers were less than expected, but still enough to be a big challenge. Now, all our institutions are very well prepared, they could easily handle a much larger number of incoming refugees and migrants, but what I’m seeing is empty houses. It’s good for the refugees – they’re living in less-crowded places. Our municipalities are still ready to handle more if they come, but they are giving up housing and teaching places because the numbers aren’t there.”

The refugees have had no significant effect on crime rates or employment levels. As a result, they’ve all but ceased to be a political issue: Amid heated campaigning for the Sept. 24 national election, migration barely registers. There’s been a debate about deportation of failed claimants, but both major parties have staked out moderate positions – voters have made it clear they don’t want huge numbers of refugees again, but they also don’t want closed borders or mass deportations. The anti-immigration Alternative for Germany party, considered a serious threat in 2016, has just about vanished in the polls (it currently stands at 7 per cent).”

https://www.theglobeandmail.com/opinion/where-are-all-the-refugees/article35827259/

#115 Mark on 07.30.17 at 9:23 pm

“This means that if I have a corporation which my family members are shareholders, I can’t pay them dividends now? So how is that any different if I were to buy my kids dividend paying stocks? Is that illegal now too?”

Did your family members pay in any equity? Do your family members have meaningful control in the business? Do you take a salary from the business that would be the same as an arms-length entity would take?

The Trudeau government is moving against arrangements which amount to shams. A doctor’s spouse, for instance, probably paid nothing into the business of the doctor. Equity accumulation in such a business is the result of the doctor’s, not the spouses, hard work. Same with the kids. Public shareholder corporations distribute their profits on a pro rata basis according to paid-in equity, and shareholders have pro rata participation in corporate governance.

I’m personally in favour of changes to the tax system which minimize its complexity. This includes abolishing tax shelters as much as possible, including RRSPs, RPPs, TFSA’s, RESPs, and similar. Every dollar that isn’t spent on accountants to understand and game these systems, is another dollar available for investment in the economy. RRSPs, TFSA’s, and the like, cause capital to become ‘trapped’ within them, impeding its mobility within the economy. The selection of investments even eligible for RRSPs and TFSA’s is quite minimal and is limited to “public” investments. Worse, these accounts create, in practice, financial planning “practices” which create ‘silos’ of investments and consumer debt.

Three pieces of advice:

Good advice generally. I do wonder though, if doctors had to collect all of their compensation directly from patients, and were not allowed to conspire with each other in any way to set fees, where their fees would end up?

Canadian doctors have the option of opting out of the public system altogether, and only treating privately paying patients. Yet, with the exception of a small handful, almost none have availed themselves of the option. If physician compensation were set below market rates by the government, certainly there would be a widespread abandonment of participation in the publicly funded schemes. Until this happens, I don’t buy the idea that any brain drain is in the future for Canadian physicians owing to compensation problems.

#116 Willy H on 07.30.17 at 9:31 pm

The Great Divide between Have’s and Have-Not’s!

“Soon the hammer will come down on business owners or medical professionals who income-split with spouses or family members, as well as the common practice of building up retirement savings within a corporation. ….
Now, why is it necessary to suddenly pull the rug out from under people who have been legally using small businesses to defer tax because they lack pensions or benefits and shoulder greater risk (while creating jobs)? …”
___ ___ ___ ___ ___
How many doctors, lawyers, dentists etc…. (highly educated professionals) are married to low earning spouses?

Not many in my experience.

Today we have three types family economic units based on marriage (common-law partnerships) driven by income levels:
HICK’s – High Income Couples with Kids (rapidly growing demographic)
LICK’s – Low Income Couples with Kids (rapidly growing demographic)
MICKS’s – Mixed Income Couples with Kids (the traditional post WWII middle class that is under threat)

Why?

It relates directly, in my opinion, to the rise of feminism (a good thing!) and the increasing presence of women working in high earning roles that have been traditionally been held by men (also a good thing!).

However, inadvertently (this cannot be overstated), we have created a perfect storm for the middle class. High income earners (government and private sector) are marrying each other in droves concentrating these incomes that would have been shared by two family units in the past into one single wealthy family unit today. These are nanny-loving Volvo-driving HICK’s.

The other half of the equation explains the increasingly large chasm between the wealthy and the struggling lower-middle class and working class. As high income couples increasingly marry each other, this leaves in middle income and low income earners to pair up. These are MICK’s and LICK’s.

This explains why wealthy couples were more likely to max out on TFSA’s, while a large swathe of low income Canadians cannot save for their children’s post-secondary education let alone squirrel away $5K in a tax shelter.

In my opinion the post-WWII middle class is on life support, virtually impossible for governments to save although they will not admit as much.

The only option is to ease the pain of lower income earners as much as possible by implementing progressive tax policies and ultimately a massive redistribution of income from have’s to have-not’s. This is well underway.

If this is not undertaken we are destined for an explosion in demand for gated communities (for the wealthy), mobile homes (for the working poor) and the spread of crime through Canada’s urban centres and suburbs. It’s just a matter of time.

Every year for almost two decades, the statistics exposing the gap between rich and poor worsen.

#117 akashic record on 07.30.17 at 9:33 pm

I warned you about racist posts disparaging aboriginals. You are no longer welcome here. — Garth

Thank you.

#118 Oblivious on 07.30.17 at 9:34 pm

The trouble with this blog is all the interesting folks get banned. The fact Happy Housing Crash guy doesn’t get banned says more about the moderator than anything else.

It says I don’t like racists and haters. Live with it or leave. — Garth

#119 X on 07.30.17 at 9:38 pm

Heavy taxes simply force more cash transactions, unreported income. Which in turn is being rewarded by a lower tax bracket for the amounts that are actually shown and higher Child Benefit Payments.

And for those that do honestly report their income, by taxing any retained earnings so heavily, the company almost perpetually becomes a start up. Very little cash reserves. Tough to succeed/survive in a market downturn.

Taxing the rich simply because they are successful. How about investing in a program to teach people not to be financial morons. A lot of people are rich and conversely poor, for a reason.

re #43-Amen.

re #55-you assume all businesses are highly successful, if you have a lean year and have a couple employees relying on you for a job, you would be fortunate to be able to retain some earnings from a previous year. Also, don’t forget the wealthy already pay more than their fair share of taxes with higher personal rates.

Could this be the most short sighted tax grab ever? 2 Years after this is introduced, there will be less business dollars to tax. It won’t take long. Why run my own business? I could drive a bus for the city. Good income, pension, more holidays, less hours. They provide my uniform and training.

Funny how everyone assumes the corporation tax only effects MD’s and DDS’s. So many other professions are affected. Everyone who has commented above and only thinks of those professions, has already been sucked in by the T2 propaganda machine.

re #72-many of us thank you for your dedication to your profession and our health care.

In regards to income splitting, too bad T2 didn’t go the other way and allow income splitting for salaried employees to do on their taxes for those families with a stay at home parent. That would be a better argument for fairness. Guess they needed the tax dollars too badly.

#120 Andrew Woburn on 07.30.17 at 9:38 pm

One thing T2 should take into account is that nearly 40% of British GP’s are expected to give up practice in the next five years and I’m not sure the supply of doctors in the US is all that great. Where does he think the recruiters are going to look?

“Government attempts to stop GPs quitting the profession are failing as four in 10 say they are planning to retire within five years, a new report has found.”

http://www.telegraph.co.uk/science/2017/07/30/nearly-40-per-cent-gps-plan-leave-nhs-within-five-years/

#121 common sense on 07.30.17 at 9:39 pm

Next step Communism?

We are 90% to communism lite.

#122 Ret on 07.30.17 at 9:44 pm

Talk about taxation unfairness is exactly what the government wants the public to do. It pits income level against income level and region against region. It is all sooo Canadian.

Everyone feels that they should pay less but that their scumbag neighbours or other provinces should pay more.

I’m up for a little class or regional warfare but all it does is divert the conversation from the real issues, government expenditures and programs a.k.a. government waste.

You know, the stuff that they you sell your vote for every election. If you are keeping score, that results in another big win for the government in power and another huge loss for the tax slaves.

Don’t play the government’s game. Unite as a country and get up on your hind legs. Bring on a tax revolt or shut up and get ready for more tax abuse.

#123 Smoking Man on 07.30.17 at 9:49 pm

When surfing in the other dimension and portray says HI

I lost my right to cry when they convicted my tears,
I lost my right to see when the mocked my vision,
I lost my right to hear your words when I didn’t nod my head in agreeance,
I lost my right to an opinion when the value of an idea was mocked and determined repressive
I lost my right to scream when the sound fell on deaf ears,
I lost my passion for democracy when the socialist told me I’m no different than a dead carcass
For we are all the same! We should all make the same amount of money, we should all live in houses that look the same, we should wear the same clothes buy the same food we should just exist until we die instead of living and find death in our own time.
Most importantly in 2017 I lost my right to protest because I do not protest for equality, I do not protest change for that is a word used in every election that lost all meaning,
They took away a right that doesn’t exist, the right to think about everything critically,
I lost my right to be me,
If I stand alone I am made to crawl, if I stand together I made to be unmoved
I will crawl forever, won’t you join me?
Let us crawl before we can walk, let us scream before we talk, let us feel anger let us feel pain, let us protect joy and laughter and be proud of our names, let me live on the path I choose to take, let me be buried where choices are at stake,
Let me do nothing, then I will destroy all the lies, let me say without consequence I don’t agree without anger at least one damn time
I digress

#124 Trojan House on 07.30.17 at 9:52 pm

Isn’t it funny how a government tries to figure out so many ways to tax people. It becomes so confusing.

Why not just have a flat tax for everything – say 20%??? Everyone pays 20% regardless of income. Even corporations.

No wait. That’s too simple. We have to confuse the hell out of people so that they can’t figure out what is going on.

#125 45north on 07.30.17 at 9:52 pm

But tax codes are not about social justice. They’re meant to build economies while raising the money to run government. Tax rules have always been designed to encourage behaviours.

As someone who worked in the Federal Civil Service for forty years, I am especially leery of giving civil servants the mandate of making things fairer. I mean how can they fail? They can always say “there we made it fairer”.

Let’s look at building economies and raising money: What about objective goals to measure the amount of money raised? Revenue Canada has the resources to measure this. How much extra money does it get by denying income splitting? How much extra money does it get by taxing retained earnings? There needs to be a detailed accounting. Let’s go further: how many small businesses stopped doing business because of the changes? How many people did they employ? To what extent did the industry become concentrated? Let me explain about concentration: I worked at Agriculture Canada: agriculture has become increasingly concentrated – big farms are buying up little farms. This trend is seen as negative but it’s happening. One more question: what evidence is there that the business moved out of Canada? An individual could move out of the country while still being employed by the same company. At the other end of the scale, the company employing many people could move out. These are relevant questions, the wealth or poverty of our country depends on the answers.

How about goals to measure the positive effects of taxation: How many small businesses stayed in business? Did they employ more or fewer people? Did the eduction/ skill level of their employees improve? Did the dollar value of their business increase or decrease? Did they buy capital equipment? Did they spend more or less on training? What about businesses that start out but fail? They are still valuable. They employ people and lessons are learned.

The emphasis needs to be on building economies and raising money but it doesn’t mean that fairness has to be ignored. For example, it’s unfair that owners can directly bill their businesses for insurance for their own private pleasure boats but I don’t think it would be that hard to spot. So the goals need to be building economies, raising money and fairness. In that order.

#126 Mark on 07.30.17 at 10:01 pm

“One thing T2 should take into account is that nearly 40% of British GP’s are expected to give up practice in the next five years and I’m not sure the supply of doctors in the US is all that great. Where does he think the recruiters are going to look?”

They’re obviously going to have to look at ‘systemic’ solutions to the problem. Creating a clean and realistic path, recognizing experience, between being a RN, and being a full-fledged MD/GP doctor capable of independent unsupervised practice would be a good start. And yes, even Canada’s surplus supply of engineers could be leveraged to some extent towards being health care professionals, particularly in some specialties such as ophthalmology and radiology with abbreviated training paths. Pharmacy needs to get out of the ridiculous practice of having pharmacists literally supervising the literal minute-by-minute dispensing of pills, and more towards pharmacists serving as consulting in their areas of expertise. I’m sure there’s other many examples which could be given as well.

It will take a lot of courage though. With the way that demographics are going, its basically game over for the western economies if they can’t get healthcare costs under control.

#127 Grooby on 07.30.17 at 10:01 pm

I used to be a incorporated contractor & income split with my wife. I had a definite advantage over full time employment, even with all extra costs. My wife did little to contribute to the corp and ‘earned’ a salary above national Canadian average. I don’t see how that’s fair to employed people who often did the same work.

Kudos to the Liberals for closing this loop, puts Canada in line with most other western democracies.

#128 -=jwk=- on 07.30.17 at 10:04 pm

Garth keeps preachign that tax avoidance is legal, tax evasaion is not. Inorporation for no other reason except to reduce taxes is evasion. plain and simple. This has been tested in court ad infinium and is well established law. Business transcations you underake that have no other economic benefit than avoiding taxes are illegal. Its called the general anti-avoidance rule (GAAR) and has been around since 1988. That rule now applies to everyone. loophole, closed.

Incorrect. Sheltering income within a corporation to reduce taxes is legal avoidance. At least until the next budget. GAAR does not apply in this case. — Garth

#129 Pete from St. Cesaire on 07.30.17 at 10:06 pm

Hmmm, May be time to start self identifying as a female… ;-)
——————————————————-
That’s what I advise people to do. Crush the whole PC system under it’s own weight.
A good example: If WW3 starts and the govt implements a draft; all the men who don’t want to die in the globalists war should simply say that they identify as a female and refuse to join. Then we’d get to see just how far the PC stuff would be allowed to go. I’m sure the transgender protection law would be repealed immediately under some illegitimate ‘war measures act’.

#130 Trojan House on 07.30.17 at 10:07 pm

#115 Mark on 07.30.17 at 9:23 pm

“A doctor’s spouse, for instance, probably paid nothing into the business of the doctor. Equity accumulation in such a business is the result of the doctor’s, not the spouses, hard work.”

Oh yeah? What if that spouse supported the doctor through med school? What if that spouse takes care of the house, kids, etc, while the doctor works long hours, often odd shifts at different hours of the day?

Your quote from above is just plain ignorant.

#131 Pete from St. Cesaire on 07.30.17 at 10:12 pm

And the moment you completely abandon property rights, which is the road we are already well down, is the moment that everyone gets to enjoy a future of declining living standards. So watch what you ask for.
———————————————————
Why do you think they’re pushing TV programs glamorising pawn shops and storage facility salvage; they’re readying the people to accept scarcity, a shrinking pie so to speak, minimalism, scavenging, etc. That’s your future.

Who is ‘they’? You know, the storage locker-mind control people? — Garth

#132 Little Dipper on 07.30.17 at 10:13 pm

“Impacted will be medical professionals…since the ability to split income with a spouse compensated for a truncated career and zero pension.”

How are their careers truncated, exactly? Or, are you referring to the nurses that find a rich doctor to marry and then “truncate” their career when they decide to stay home and raise the kids while being paid as an employee of their spouse’s corporation?

I’m not sure comparing doctors to entrepreneurs is fair either: as an example, a friend of mine is a senior radiologist in an Ontario hospital where he earns over $600,000 a year. He’s on staff, but all of the radiologists are a corporation that sells their services to the hospital. I don’t see a whole lot of risk there…

#133 Smoking Man on 07.30.17 at 10:15 pm

Deplorables by the dyslexic Smoking Man

It’s a good escape, 3-hour flight to nothing.

#134 TheDood on 07.30.17 at 10:16 pm

#39 sunshine on 07.30.17 at 4:38 pm
…..suggesting that changing the rules of incorporation will somehow reduce the number of people interested in joining the profession, send them to the poorhouse, or result in a mass exodus to the states is hyperbolic.
__________________________________________

I really hope you’re right. But why would anyone go to university for 10+ years, residence for another 2, and leave school with a 6 figure debt and stay? What would be the motivation to do this? The one word that jumps out? – stupidity. People that go to school for that long are not generally stupid. The dumb ones will stay, smarter ones, gone!

#135 Adios on 07.30.17 at 10:23 pm

So let us as the public assess if T2s rock star agenda truly warrants his salary.The only photos of him are at every bs event across Canada or attending trade negotiations at some prime global location.Instead of frollicking around a parade float let’s see him do a couple hours labour on an oil rig or drive a rig for 8hrs in a blinding snow storm.Fat chance I’m sure.Easier to take Canadair jet st $15000 an hour and reimburse taxpayers
what economy tickets would have cost.And this was on a vacation to boot.And the govt promotes fairness,what a crock.

#136 Al on 07.30.17 at 10:33 pm

Tax equality is all good and fine, assuming that T2 and Morneau can add every Canadian onto that gold plated public service pension that our government workers currently enjoy.

#137 Pete from St. Cesaire on 07.30.17 at 10:34 pm

“A doctor’s spouse, for instance, probably paid nothing into the business of the doctor. Equity accumulation in such a business is the result of the doctor’s, not the spouses, hard work.”
Oh yeah? What if that spouse supported the doctor through med school? What if that spouse takes care of the house, kids, etc, while the doctor works long hours, often odd shifts at different hours of the day?
———————————————————
That’s what I was going to bring up. In divorce cases the ‘work/contribution’ of the wife is always factored as the time she spent in her role of behind-the-scenes support (home making, child-rearing, etc) for the principal breadwinner, when alimony payments are being determined. Now the govt wants to say that, tax-wise, none of that hard work on the part of the spouse counts for anything.

#138 InvestorsFriend on 07.30.17 at 10:39 pm

I’d have to agre with Mark

#130 Trojan House on 07.30.17 at 10:07 pm
#115 Mark on 07.30.17 at 9:23 pm

“A doctor’s spouse, for instance, probably paid nothing into the business of the doctor. Equity accumulation in such a business is the result of the doctor’s, not the spouses, hard work.”

Oh yeah? What if that spouse supported the doctor through med school? What if that spouse takes care of the house, kids, etc, while the doctor works long hours, often odd shifts at different hours of the day?

Your quote from above is just plain ignorant.
***************************************
I’d have to agree with Mark on this one. Regular T4 employees are not allowed to income split by paying the spouse to look after the kids. Why should doctors get away with via sham arrangements where no real work is done for the practice. It is okay if real work is done for the practice and paid at market rates.

So myopic. It’s about the income, not the spouse. — Garth

#139 meslippery on 07.30.17 at 10:42 pm

Garth is always on about benifits, pension holiday pay.
He has yet to say overtime but ok.Yeah realy rare these days.Ask the next cab driver.

#140 BillyBob on 07.30.17 at 10:54 pm

#118 Oblivious on 07.30.17 at 9:34 pm
The trouble with this blog is all the interesting folks get banned. The fact Happy Housing Crash guy doesn’t get banned says more about the moderator than anything else.

====================================

Ban? Are you nuts? Happy Housing Crash is hilarious! There is is just something very funny about his/her writing style and unabashed glee at the idea of a housing crash. The only people who would be offended are those who take a crash seriously (hmmm…) or the usual glum people just plain missing the humour gene, of which there are more than a few.

I am thankful for my Canadian citizenship. Grateful. But every day, every single day I am more and more filled with gratitude for no longer being a resident, or having any ties to the political mess that is has become, beyond the only ones that count – family.

The path that Canada is on, of becoming a nation apparently determined to make everyone “equal”, has been tried before. It has failed miserably, every time.

Canadians are about to learn what the rest of the developing world already knows: that no one “deserves” an easy, comfortable life. And that life isn’t “fair”, and “fairness” cannot be legislated. Except that the rest of the world has had practice living this way. It will be painful for those not used to it.

I will say though, that it is interesting to watch from outside the borders, a real-time, live-action production of Animal Farm. Everyone equal, just some more equal than others.

Now back to your smartphones, everyone.

#141 Roial1 on 07.30.17 at 10:54 pm

I see one major chance to see your Dr.
You wave to him as he crosses the boarder going south for the last time.

#142 paul on 07.30.17 at 10:56 pm

24 Trojan House on 07.30.17 at 9:52 pm

Isn’t it funny how a government tries to figure out so many ways to tax people. It becomes so confusing.

Why not just have a flat tax for everything – say 20%??? Everyone pays 20% regardless of income. Even corporations.

No wait. That’s too simple. We have to confuse the hell out of people so that they can’t figure out what is going on.
—————————————————————–
Great idea,one problem why take 20% if they can get 50%. Then tax your house, your fuel,your electricity it goes on but to big to list. One more 13% when your spend it.

#143 Spock on 07.30.17 at 11:02 pm

#53 Millennial Investor

I hope this is not that screwed millenial (now banned) under another name because the intellectual capacity seems to be the same.

Maybe Millenial investor should say what he wrote to his doctor or the guy treating him when he is next in the hospital (though low IQ does not get admission to hospital yet).

Have the guts – do the right thing.

—————-

#53 Millennial Investor on 07.30.17 at 5:23 pm
I can appreciate providing tax breaks for small business that create jobs, but becoming an MD, billing OHIP and ‘hiring’ your extended family does not equal entrepreneurship.

To all of the whiny old doctors…please, do us a favor and move to the US already. Pay the ridiculous malpractice insurance rates, live in fear of litigation and deal with the realities of the free market. There will be many recent and foreign grads lining up to take your place :)

#144 conan on 07.30.17 at 11:03 pm

Is this the whiny Cons R us comment section? Good riddance to the Harper government, they were brutal. No one wants to see that ever again.

Time to fix this country.

https://youtu.be/vTHYHW-eWRo?t=17

#145 El Joko on 07.30.17 at 11:05 pm

Tax codes are absolutely about social justice.

Even Adam Smith himself recoiled from the idea of a society designed solely to serve the wealthy. He called for basic support – education and welfare – of people, arguing quite correctly that no wealthy man would sleep peacefully without the power of the magistrate (funded by taxpayers) and without some benefit for the poor (like education, also funded by the taxpayer).

So, get real.

#146 Spock on 07.30.17 at 11:05 pm

Sure thing Grooby. Whatever you say. Looks like you are a man of principle. Once you are done paying your wife, you do not want others to be able to do the same.

If you believe in it so much – make a contribution for all the taxes saved in your wife’s name to the Liberal Party. You will get a big charitable donation and you will be T2’s best pal for the next 5 minutes after the donation.

Maybe you will even get a selfie.

#127 Grooby on 07.30.17 at 10:01 pm

I used to be a incorporated contractor & income split with my wife. I had a definite advantage over full time employment, even with all extra costs. My wife did little to contribute to the corp and ‘earned’ a salary above national Canadian average. I don’t see how that’s fair to employed people who often did the same work.

Kudos to the Liberals for closing this loop, puts Canada in line with most other western democracies.

#147 BC_Doc on 07.30.17 at 11:16 pm

0 Trojan House on 07.30.17 at 10:07 pm
#115 Mark on 07.30.17 at 9:23 pm

“A doctor’s spouse, for instance, probably paid nothing into the business of the doctor. Equity accumulation in such a business is the result of the doctor’s, not the spouses, hard work.”

Oh yeah? What if that spouse supported the doctor through med school? What if that spouse takes care of the house, kids, etc, while the doctor works long hours, often odd shifts at different hours of the day?

Your quote from above is just plain ignorant.

——————————————-

My wife and I met in college when I was an Arts major without a clue as to what I wanted to do for a career. Her income kept our family afloat and covered the tuition while I went to medical school and completed my residency. I consider her an equal partner and investor in our medical corporation.

#148 Leo Trollstoy on 07.30.17 at 11:28 pm

#115 Mark on 07.30.17 at 9:23 pm
A doctor’s spouse, for instance, probably paid nothing into the business of the doctor. Equity accumulation in such a business is the result of the doctor’s, not the spouses, hard work.

Let me guess. A pregnant spouse probably paid nothing into a household either.

Brutal

#149 wallflower on 07.30.17 at 11:33 pm

I sent this:

Subject: changes for incorporated entities

Bankrupt plans are about to bankrupt business. Watch the flight across the border.
Watch the Ontariowe introduction of the $15 minimum wage.
Watch the debts grow and innovators leave.
Canadian employers will be civil service and offshore.
A tipping point is underway.
If I were young, I would leave.
I will be advising all youth who ask my advice to leave.
Innovators and job creators are no longer welcome.

#150 Ronaldo on 07.30.17 at 11:34 pm

#72 BoomerKid

It seems you may have been better off to have gone to trades school and hired on as a mechanic at 38.00 bucks per hour for the City of Red Deer and gotten a 14 year head start in a career with all the juicy benefits that come with the job. You would have already earned a million and be debt free and likely have a home paid for. Check out the salaries for physicians and surgeons.

https://ca.indeed.com/cmp/The-City-of-Red-Deer/salaries

#151 Jay (not that one) on 07.30.17 at 11:37 pm

I can’t help but think: shouldn’t the market be deciding whether you taking risk and building a business is more worthwhile than taking a salaried position? Why should it be the government actively trying to choose one of two paths if they are equally lucrative?

Let’s let the market decide if going into business is the right decision, and leave the arguments for dodgy tax schemes on the cutting room floor.

#152 Ronaldo on 07.30.17 at 11:46 pm

#100 Keith

”But if Jimmy Pattison can accumulate 7 billion + domiciled in Vancouver, tax bite can’t be too bad.”
——————————————————————
Jimmy employs 40,000 people and gives millions away. I suspect he’s not that concerned about paying his fair share of taxes.

#153 acdel on 07.30.17 at 11:54 pm

As much as I love this country and surely have paid my fair share to contribute to this great country. It is getting or has gotten to the point (almost) as to why anybody would retire here. When one spends 5 bucks for a loaf of bread or 5 to 15 bucks for a block of cheese when we are surrounded by wheat fields and have more dairy cows then we know what to do with??

Those of you who have traveled to western nations or politically stable countries get it!! There is absolutely no need for this, we have it all, we are sheep!!

#154 Chaddywack on 07.31.17 at 12:02 am

Bah, there’s no fixed genders anymore under Trudeau and his extreme leftist Liberals anyway.

To all the men out there, it’s simple. Just say that you identify as a woman. Tax avoided.

Problem solved.

What a crazy world we live in.

#155 Chaddywack on 07.31.17 at 12:07 am

Also the move to tax women differently would be legal most likely.

Section 15(2) of the Charter of Rights clearly says that it is not discrimination to implement programs that ameliorate the conditions of a disadvantaged group.

Women are disadvantaged because they earn less than men. It’s the same section that allows Employment Equity programs that allow the government to choose a candidate who is a woman, aboriginal, visible minority, or disabled ahead of other qualified candidates because of their disadvantaged status.

I don’t agree with this or the fact it’s in the charter. I think everyone should be treated the exact same, but you can thank T2s dad for that clause.

#156 Chaddywack on 07.31.17 at 12:14 am

Actually, despite my earlier comment any proposal like that might actually be in violation.

Section 28 of the Charter states

“28. Notwithstanding anything in this Charter, the rights and freedoms referred to in it are guaranteed equally to male and female persons.”

Don’t think Trudeau can actually do it.

#157 Spock on 07.31.17 at 12:24 am

Tax Planning Using Private Corporations

It really looks like the morons who wrote this have their agenda all charted out.

Not sure how you can tax investments in the corporation at full tax rate and then tax again when the same money is taken out.

What was curious was the way they were planning to tax the 50% tax free capital gains (in the document they have mentioned taxing it as a dividend).

In the example of the businessman making $220K vs the salaried employee making $220K – the intellects at Ministry of Finance have conveniently forgotten to take into account the cost of the benefits (employer match in pension or Group RRSP + health benefits etc. which account on average to 25% of salary) – benefits which the businessman does not have.

Also on layoff, the employee will get a severance (probably a big one for someone making $220K) and then can get aroun $21K+ from EI.

And they are worried that the poor employee is paying $35,000 more in tax while getting much more in benefits etc.

It is amazing that these jokers got elected with a majority but now the whole of Canada has to suffer the same way Ontario has suffered for last 10 years or so.

I am going to lock in my capital gains inside the corporation in 2017 while I can before these jokers change the rules for the worse.

I knew T2 would not have any grasp on finance but Bill has really outshone himself and looks like sitting in daddy’s company and all those fancy degrees did not add any common sense.

God bless us all

#158 MF on 07.31.17 at 12:34 am

#144 conan on 07.30.17 at 11:03 pm

I would argue that anyone under 30 who votes Liberal is the norm. This is because generally this group has accumulated less wealth so far, and has the most to gain from wealth redistribution policies.

For anyone over that age who is still voting Liberal, it usually means something went wrong. Usually bad choices, but could also be bad luck/lack of options. Something has caused the perception of “injustice”.

#140 BillyBob on 07.30.17 at 10:54 pm

Remember only 40% of us voted for these clowns.

#136 Al on 07.30.17 at 10:33 pm

Go become a firefighter and run into burning buildings, or policeman and risk being shot at every day by the scum of society if you want that “gold plated pension” yourself.

MF

#159 yorkville renter on 07.31.17 at 12:46 am

my $0.02 –

cut income taxes for all.
raise the GST.

#160 MF on 07.31.17 at 12:46 am

#72 BoomerKid on 07.30.17 at 6:35 pm

I’ve worked evenings and weekends for my entire working career (along with tons of others) so I don’t care sorry.

Being a physician is not always about the money, you are right, but it is about the guaranteed job for life you get after your training.

The problem with almost everyone who works (or owns a business) is the risk you will get laid off at some point, or that your business closes. Dr’s do not have to ever worry about that.

And the public? The public still views Dr’s as a position of prestige.

MF

#161 Mike on 07.31.17 at 12:57 am

.
Everyone here is bringing up Oh, Doctors spouse support doctor career and blah and blah. Stay home and give up on personal career. What a sham argument, just like income splitting/sprinkling.

Well, does nobody else’s spouse support their career and nobody else’s spouse gave up their career to support others and take care of family.

None of these arguments justify sham tax avoidance arrangements of income splitting.

#162 Fake News Again on 07.31.17 at 1:06 am

#136 Al on 07.30.17 at 10:33 pm
Tax equality is all good and fine, assuming that T2 and Morneau can add every Canadian onto that gold plated public service pension that our government workers currently enjoy.
___________________________

And cancelling income splitting is just the beginning. How do you think govt workers GET those gold plated pensions? By taxing you more and more and more. There is a 500 billion dollar pension deficit in this country. You aint seen nothing yet when it comes to taxes sunshine. And if the Canadian people do nothing, they deserve to pay every cent to the govt workers who feel it is their right to “rule us plebs”.

#163 All on 07.31.17 at 2:00 am

Thank you for the detailed breakdown boomer kid, looks like you spent some time thinking about this. However I’d like to point out some details they may be helpful. TL/DR warning.

Your net income is 131k, so i’m gonna make an educated guess you’re in nfld/lab. The 21.5k your putting aside for your self funded pension, that should most likely go into an RSP which will net you about 10k in tax refund, bringing your actual net income up to 141k. But wait, all that money you spent on tuition can be deducted against your income now (hopefully you didn’t use it on the internship pay). The
29k a year for 10 years @2.95% sounds like about 250k of debt. For simplicity sake, if you use 25k of that debt against your income for the next ten years, you’ll get back almost 50% of it back at the two highest tax brackets in your province (starting at 180k). That’s an additional 12k in your pocket every year while you pay the school loan back. This brings your net salary to 153k. I understand this high salary wasn’t free, it will cost you 29k for the next ten years in debt repayment. That will still leave you with a net of 124k . Don’t forget that it may be very probable that your average worker also had lots of school debt (30-60k), albeit probably not to your extent. They’ll probably need that schooling to get that sweet, average 76k pension as discussed below.

With regards to the 21.5k to fund your 76k/yr retirement, you will receive the CPP (about 10 k a year) you would have paid into during your 30yr working career, and OAS (the maximum 7k year as clawback starts at 76k), so you would only need to save up for 59k/yr retirement, you actually only need to put aside about 16.7k a year.

That leaves you with a net salary of 108k after funding your “average” retirement of 76k.

Also the median salary in Canada for one person is nowhere near 76k/year gross. It is much lower. Along those lines, a take home income of 141k or 124k (210k gross) is decidedly not middle class, especially at 35. This will put you on a very high percentile of the population, even more so if adjusted for age. Even more so if adjusted for your province (the location is relevant as it affects your cost of living and your salary). The salary of a highly specialized doctor such as yourself will also increase very nicely as your career progresses.

Let’s continue to assume you desire a 76k/ year retirement, whether or not it’s average. You’re a doctor, I want you to be comfy in your old age.

The hypothetical average Canadian worker who makes 76k with a defined benefit pension and who has access to 13.5 hours of paid overtime every single week. I’m going to assume you chose 76k gross base salary because you believe they will get a pension of 76k. To steel man your argument, let’s assume all the following is accurate, the average salary of 76 k and a defined benefit pension plan which hardly any worker has anymore. We will use the platinum standard of db pension plans as example (to make your average worker even more fortunate) which even less people have, the federal plan. The maximum pension you can receive is 70% of your five highest paying years and requires 35 years of most likely enthralling, cutting edge and rewarding grey cubicle work. So your 76k gross worker is only getting 53k at best (35 years) or 46k if they work 30 yrs as in your example. Your average worker actually needs to earn 115k/yr to get that sweet 76k pension after 35 years or 126k @ 30 yrs. But there’s more, that pension isn’t completely “included” in their salary, they need to pay about 12% of their gross salary every year towards it. This leaves our now “average” joe- six(figure)-pack with over 14k (or more) less a year.

Your pension will be subject to less than half the normal tax (only capital gains tax) and average Joe six-figure-pack will pay the full rate on his db pension. Now joe needs an even bigger pension to match yours after tax. Your estate will receive a seven figure amount in all likelihood and joe’s will get zilch unless it’s a surviving spouse who may get a small annuity.

So your STARTING salary is more similar to a joe earning a base salary closer to 150k gross + platinum db. The percentage of people with that are very small, probably much less than the number of doctors.

Boomer kid, You’re richer then you think ™.

#164 BoomerKid on 07.31.17 at 2:33 am

#115 Mark

Doctors do not “conspire with each other in any way to set fees”. The government sets the fees, which is why they are dramatically lower than the US and also why they are substantially lower than similar fees for other professions.

This article compares the cost of cataract surgery for dogs, humans in Canada, and humans in the
US and explains why the cost for humans in Canada is so low relative to both (largely due to the government’s monopoly power to keep fees low).

https://www.theglobeandmail.com/report-on-business/economy/economy-lab/visit-to-vet-an-eye-opening-adventure-in-private-care/article618483/

Canadian doctors do NOT “have the option of opting out of the public system altogether, and only treating privately paying patients”. This is frankly illegal based on the Canada Health Act. There are some exceptions to this (WSIB patients, professional athletes, and military + some politicians/diplomats under certain circumstances), but for the most part anything that is covered by the public system, doctors cannot legally charge for. They can charge privately for anything that is not covered (eg. most cosmetic procedures, sick notes, insurance forms, etc.)

I’m not an economist, but my understanding is that our single payer system keeps fees for doctors low due to the government’s monopoly power, but doctors can partially make up for this by having endless amounts of work (long waitlists), so they don’t have too much downtime between patients.

#165 Mark on 07.31.17 at 2:57 am

“Oh yeah? What if that spouse supported the doctor through med school? What if that spouse takes care of the house, kids, etc, while the doctor works long hours, often odd shifts at different hours of the day?”

These issues are not unique to the medical profession. A spouse who supports a doctor through med school should take steps to protect his/her interests through, for instance, a formal debt obligation, or some form of interspousal contract (sometimes called a prenuptial agreement) which outlines the value of these contributions and the consideration thus owed.

I’m all for a tax code which recognizes that the spouses of high income earners often make enormous personal, but non-monetary contributions. But I do think that its important that such be made available to all professions and occupations for which this may apply. Not just a few chosen ones that happen to have the opportunity to use advanced tax planning strategies and incorporation.

#166 BC MD on 07.31.17 at 3:07 am

I’m a specialist doc in a medium-small BC town, and the only specialist of my kind in town. I just graduated residency a couple years ago, and just finished paying off my debt. I haven’t bought a house yet (still renting Garth!).

If these proposed changes go through, then I’ve had it with working in Canada. What’s the point in staying here, and moreover, what’s the point in working hard? There are plenty of other countries with better compensation, lower taxes, and more affordable real estate markets. That all equates to a better quality of life for me and my family. It’s too bad as well, the Canadian tax payer subsidized my 13 years of education and won’t see any of the benefit.

It’s too bad for my town though, they won’t be able to replace me anytime soon.

#167 Oft deleted much maligned not politically correct or sensitive stock picker on 07.31.17 at 6:00 am

#6 Jason…..just wait until Junior is reelected….there might more fairness in the wings…..like “white privelage tax” in order for new comers to catch up. Bizarre….nothing this goofball does and says is too far out.

Want FAIRNESS? Claw back all union contract that put civil serve wages and benefits above every other Canadian. What is fair about union civil servants getting a massive free pension and a stress free lifetime of not having to save a nickel know the tax payer is subsidizing them unfairly. Why does a civil servant get any more job security than the doctor? If Moroneau and Junior want fairness then level the playing field for everyone…..not just cherry pick at the group least likely to vote Liberal.

What is fair about being self employed and having to pay double CPP & EI? These clods have no thought of creating a fairness in the tax system this is just pandering to a Braine dead millennial constituency that is currently waffling the polls. Why does a self employed person have to pay twice…..they’re lucky he’s honest enough to file at all.

#51 Spangler…..houses are exempt because they were paid for with already taxed money. If they try to slap a gains tax on housing they will have to rebate every dime we paid in tax prior to buying the house , to save a down payment …and the mortgage carried and associated costs. It would bankrupt the government if tax fairness were applied. They could start with the millennial , new Canadians and any new purchase…..because it could start a new system where mortgages were tax deductible against future gains. If the Millie’s want that let them go ahead…..but for boomers the taxes have already been paid.

#46 Cow man……exactly…..civil service compensation makes these coddled brats the 1% era in Canada….they stand as the elite among all others. Plenty my friends were doctors and lawyers..in Canada..burned out….like me….a maddened trader…too much stress…..now with the latest attack…screw it most say….they’re moving or quitting early. Here’s the creeping liberal thing though……if your kids are not already in…..it’s almost impossible to get in now and going forward as the Trudeau Liberals have a sign on the door “no whites need apply’. They are only hiring by ethnic voting bloc. Sad but true…..when Trudeau said Canada was for new immigrants and he didn’t respect traditional Canadians….that wasn’t just another stupid Trudeau gaffe…..he actually means it.

#72 Boomerkid…..I fully respect your drive to get where you are…..thank you and congratulations…..from me….but from your Trudeau Liberals……’F You’…..and that’s sad. Someone with your education is the enemy in Canada. It’s a mentality the civil service brings back from Cuba…..why the civil servants go to Cuba in such huge numbers must mean something….it’s telling…..because they want cab drivers and doctors on the same pay scale. My advice young doctor……get out now. The state of Texas is calling you with open arms. I worked there many years…..a fantastic place. You’ll pay off your debt years early earning USD. You’ll buy a beautiful house because a mansion in Dallas is under $400,000.00 and new cars are half price because of no state taxes stealing every dime you make. Groceries are a quarter of Canadian prices…..insurance etc etc ….all much less…..while living in a gorgeous exciting place with lots of things to do. While Canada’s liberals are focused on the idea that Canada’s families are getting smaller ( because middle class parents can’t afford more than one child) and mass immigration is needed…….families in Texas are averaging four to six kids because of the greater disposable income… Don’t waste your life on Canada….seriously……the dreams you were taught….have been stolen away…..cause as Trudeau says…..it’s not your country anymore.

#168 Mark on 07.31.17 at 6:02 am

~2% of Canada’s GDP is in RE fees:

http://www.cbc.ca/news/business/real-estate-fees-home-sales-1.4226630

“Canada’s addiction to real estate goes far beyond our obsession with talking about it. Our economy actually relies more on the fees associated with buying and selling houses than it does on agriculture, fishing, forestry and hunting combined.

#169 Stone on 07.31.17 at 7:14 am

#159 yorkville renter

my $0.02 –

cut income taxes for all.
raise the GST.

——————————

I’m good with that idea. Considering that gouvernment wants to promote consumption, it probably won’t fly. Good idea though.

#170 OttawaMike on 07.31.17 at 7:26 am

#17 Kim
We think alike.

Garth,
Why is it that a handout to the rich is called an “incentive” but an incentive to the poor is called a “handout”.

#171 OttawaMike on 07.31.17 at 7:40 am

#168 Mark

Don’t worry about the realtors. their business model is going the way of taxis and hotels.

Too lax of controls and discipline by the likes of RECO plus an outmoded fee model will slowly weed the industry of its scammers and bring fees in line with reality.

#172 MF on 07.31.17 at 7:47 am

#166 BC MD on 07.31.17 at 3:07 am

Hmm lets see:

-Gets the privilege of “studying” in medical school, which is a luxury, that is taxpayer subsidized the whole time and then complains about the government (hope you didn’t vote Liberal in the last election).

-Pays off his student debt “in a few years” when most other graduates (some with Phd’s) take 15 years cobbling together 3 part time contract jobs that pay minimum wage.

-Asks what the point “of working hard is” when his/her profession affords what every person wants more than anything -stable and continuous employment. Moving forward in a world of automation and contract work crap, having a job for life is a luxury.

-Assumes he/she is irreplaceable when there are a trillion undergrads and foreign trained specialists clamoring to get into medical school for the privilege of studying (school is a luxury).

-Threatens to leave the country that has given him/her so much for money. Assumes he/she will be able to handle the legal mess and competition for patients that being a MD in the US or abroad is.

BC MD, unfortunately in a world of 7 billion people, no one is irreplaceable. Hopefully the changes can be reversed when a better government is elected.

MF

#173 Yuus bin Haad on 07.31.17 at 7:47 am

So good to know that the Liberty Party has out backs.

#174 Dave on 07.31.17 at 8:25 am

Last!

Ok, so small businesses are job creators. Do the income sprinkling kind skew the stats on the number of jobs they create? Let’s get rid of income sprinkling, job growth measures will be easier to interpret.

And doctors and lawyers won’t all be impacted, let’s not exaggerate Garth. Most of them mate with their own kind, they meet in university or at work. Not all peasants luck out and marry a professional incorporated dude or dudette.

#175 Mark on 07.31.17 at 8:44 am

“…..houses are exempt because they were paid for with already taxed money. If they try to slap a gains tax on housing they will have to rebate every dime we paid in tax prior to buying the house , to save a down payment …and the mortgage carried and associated costs. “

Maybe instead of taxing the appreciation on the house, they tax the gain on depreciation in the debt taken on to buy the house?

But wait, don’t they already do this by taxing the mortgage interest payments in the hands of the banks and the people who buy the GICs? Yes they do! The ‘problem’ is that those payments often end up in tax-exempt entities such as RPP’s, TFSA’s, RESPs, RRSPs, rather than being exposed to ordinary income tax rates.

If the government wants to kill excessive exposure to fixed income and create an investment climate that encourages business investment, they need to kill off the fixed income bubble. One way of accomplishing this is to eliminate the exemption on tax that exists in these “tax shelters”, by killing the tax shelters themselves (ie: abolish RRSPs, RESPs, TFSA’s, RPP’s, etc.). Voila, people will have to start taking more risk for their return, and fixed income will look an awful lot less attractive.

BTW, the ‘tax’ that is built into the depreciation of debt is collected by the banks in the form of higher interest rates. A typical 25-year mortgage borrower at typical long-term interest rates, might repay a lender 3 houses worth of payments by the time the obligation is paid off. The lenders are typically handing over at least one of those notional “houses” to the government in the form of income taxes. Hence, the government already does collect substantial taxes arising from capital appreciation in principal residences. And doesn’t have to fork out corresponding tax credits either as there is typically no interest deductibility for borrowing to invest in a principal residence.

#176 Ezzy on 07.31.17 at 8:57 am

“Finally, the government is studying differing taxes for men and women.” K that’s enough for me, final straw. Born in Canada in 1979 and I barely recognize this country anymore. I’m taking my company up on it’s offer and moving to the states. I’d rather live with a tinge of paranoia than the fetid policies and hypocrisy that’s flooded Canadian government. This screwball country can keep it’s (dystopian) vision of socio-economic equality, and fail with it too. I’ll take the lower tax levels, lower cost of living, and watch Canada hollow itself out.

#177 Ezzy on 07.31.17 at 9:00 am

Stupid auto-correct added apostrophes to my its (comment 176)! Mind you, I suppose I could’ve proof read but I was beset with rage.

#178 NetCentric on 07.31.17 at 9:08 am

Hi Garth. Enlightening article on this issue from one of our local doctors in BC. Quite an eye opener for me in many ways about the business of being an MD.

http://www.timescolonist.com/opinion/op-ed/comment-incorporation-changes-will-hurt-mds-and-you-1.21435344

I’d copy/paste the whole thing here but I’m not sure about the legal issues around that.

#179 Joe Schmoe on 07.31.17 at 9:16 am

We voted for a nanny state and we are getting it.

Never vote for more government/intervention.

http://www.cbc.ca/news/canada/british-columbia/trudeau-bc-wildfire-1.4227855

This is what bugs me, they want more money (and take it) and then basically admit they mishandle it…can we please give more?

Taxing people more will mean less to those who need it.

Canadians are tireless though…we will help out and let these mismanaged governmens brag about all they did to help.

How is your local Foodbank doing?

#180 Keith in Calgary on 07.31.17 at 9:17 am

Liberals are the pallbearers of societies.

Globalism is a crime against humanity.

#181 Pete on 07.31.17 at 9:56 am

OttawaMike on 07.31.17 at 7:40 am
#168 Mark

Don’t worry about the realtors. their business model is going the way of taxis and hotels.

Too lax of controls and discipline by the likes of RECO plus an outmoded fee model will slowly weed the industry of its scammers and bring fees in line with reality.
____________________________________

They government better do something before no one wants to work. Cousin a few months ago quit his construction job and became a realtor. No joke he said ” you can’t make enough money working” . ” If you can make a couple of sales a year you make more then working”. No one wants to work anymore and being a realtor is the perfect lazy job. Just have to pretend to be successful and lie like a realtor.

#182 re., 53 on 07.31.17 at 10:25 am

To all of the whiny old doctors…please, do us a favor and move to the US already. Pay the ridiculous malpractice insurance rates, live in fear of litigation and deal with the realities of the free market. There will be many recent and foreign grads lining up to take your place :)

……..

i can say with full confidence, you have no clue about ‘the realities’ of healthcare.

foriegn grads lining up till fill specialties? PROVIDE proof. Thank you

(new grads will re-assess their alternatives.)

#183 Only 811 days til next election on 07.31.17 at 10:27 am

A great deal of worry and frustration among fellow ccpc owners, some have no idea what could be coming. So Garth or anyone, aside from writing our MP,what else CAN we do? I cant just sit and watch this gong show, the stupidity of this government is shocking. I feel like a sitting duck.

#184 Oxymoron on 07.31.17 at 10:34 am

I’m from the government, and I’m here to help you.

#185 Income Splitting on 07.31.17 at 10:40 am

“Income-splitting will be toast next year”

Why only 2% should have luxury to hide income in splitting.

Is it ethical to split your income to avoid taxes? Why same rule shouldn’t be applied to salaried employees. Many times, they work more than what they earn with substandard attitudes from business owners
How many % employees are getting pensions benefits??
Where does all HST go, collected by small business retailers, Perhaps their Accountants know better.

Only Docs are being discussed. Nobody points; there is new emerging class of Audi/BM/Mercedes REALTORS use the same concept to protect their wealth in income-splitting.

#186 Kevin on 07.31.17 at 10:46 am

Regarding the “men/women/taxation” thing, I don’t know about taxation, but shouldn’t men and women pay different rates for CPP? Currently, there is zero difference in premiums depending on one’s gender. It’s not even a factor. Your contributions and benefits are based on your income, when you start collecting it, and so on. Gender isn’t considered at all.

But maybe it should be? Statistically, women live longer than men. And those extra years invariably occur at the very end, when they’re collecting CPP.

Therefore, while they pay in the same amount as men, they collect more out (by virtue of living longer). So maybe we should consider factoring gender into the rates/benefits calculation, in the interest of fairness?

This is not a new idea. Several European countries have already been doing this for a long time. Is it really such a crazy notion? If one demographic stands to collect more out of a program, isn’t it reasonable that the rate they pay should reflect what they’re likely to collect?

#187 BillyBob on 07.31.17 at 10:50 am

#170 OttawaMike on 07.31.17 at 7:26 am

Garth,
Why is it that a handout to the rich is called an “incentive” but an incentive to the poor is called a “handout”.

===================================

An incentive to someone who generates economic activity is not a “handout”, as it will produce a return.

A handout to someone who’s only intent is to consume will not be an incentive other than to consume and is thus by definition a handout.

If it really has to be explained why people who start companies are more valuable (economically) than people who work for them, then the country is finished.

#188 n1tro on 07.31.17 at 10:52 am

#27 Ace Goodheart

Excellent idea! I will check off the “female” box if it will allow me to save on some taxes coming up. In this “progressive” society, not even the courts can question what an individual thinks they are?! Charter of Right y’all!

#189 Ottawan on 07.31.17 at 10:58 am

“So myopic. It’s about the income, not the spouse. — Garth”

Then why should a doctor without a spouse pay more tax than a doctor with a stay-at-home spouse?

Let everyone income split or let nobody income split.

#190 Stan Broock on 07.31.17 at 11:00 am

A house of cards it seems.

Canadian economy’s addiction to real estate fees is ‘stunning,’ says analyst

https://ca.finance.yahoo.com/news/canadian-economy-apos-addiction-real-090000482.html

2 % of or GDP is house sales related fees – land transfer tax, etc.
It probably drives another 2-3 % in consumption/services, as/when these money are spent into the economy.

Real estate is de-facto the economy, driven by extreme credit bubble.

House activities drive further consumption so what we see now in essence is extremely over-multi-leveraged, overblown (based on fundamentals), overheated economy running on extremely cheap credit, which can not last any longer.

When (not if) the music stops, the economy implosion in real terms could be catastrophic when the economy ‘normalizes’ back to real fundamentals driven economy, not mindless consumption.

In nominal terms the gaps most likely will be attempted to be patched somehow by extremely week CAD.

#191 Stan Broock on 07.31.17 at 11:08 am

#183 Only 811 days til next election on 07.31.17 at 10:27 am
A great deal of worry and frustration among fellow ccpc owners, some have no idea what could be coming. So Garth or anyone, aside from writing our MP,what else CAN we do? I cant just sit and watch this gong show, the stupidity of this government is shocking. I feel like a sitting duck.

—————————-
I was told once the following Canadian wisdom:
Suck it up and move on.
There is nothing you can influence or change in this place.

Loot at the number of idiots happy with the fact that their doctors will be screwed. Pathetic.

#192 Alberta Ed on 07.31.17 at 11:10 am

So, everyone is to be screwed (tax-wise) equally. Canada has already become a lousy place to invest for international resource-based companies (Petrobas), and this will encourage many entrepreneurial Canadians (like our two sons and families) to move south for better opportunities. Way to go, Justin! That’s leadership for you!

#193 n1tro on 07.31.17 at 11:15 am

#50 Trust Fund Baby

Can’t tax a “gift”. T1 money to T2 in trustfund is a gift of already taxed money.

#194 Stan Broock on 07.31.17 at 11:20 am

#178 NetCentric on 07.31.17 at 9:08 am
Hi Garth. Enlightening article on this issue from one of our local doctors in BC. Quite an eye opener for me in many ways about the business of being an MD.

http://www.timescolonist.com/opinion/op-ed/comment-incorporation-changes-will-hurt-mds-and-you-1.21435344

I’d copy/paste the whole thing here but I’m not sure about the legal issues around that.

———————————-
Exactly. Not a tax loophole (contrary to the wild Bill’s lies) but law introduced by intend.

All doctor haters should read this.

#195 n1tro on 07.31.17 at 11:24 am

@#62 Izzo

“There is no risk in being a doctor or a dentist as that is a guaranteed ticket to the good life.”

So a tax on the smart is fair? I guess a tax on the stupid who couldn’t make it as a doctor or dentist is equally fair?

Back in line you pleb!

#196 IHCTD9 on 07.31.17 at 11:34 am

#18 Double CPP on 07.30.17 at 2:58 pm

…If this is about fairness, scrap the x2 CPP contribution the self employed need to pay. It’s not like we get double the payout when we retire. We get the same amount as everyone else.
______

It’s about tax revenues, not fairness.

T2 could easily have given breaks and incentives to those who don’t own a small corp. and give them the same perks. But that would have lowered revenues wouldn’t have it?

Much better to produce “equality” by scalping the top end. This way revenues increase, and the T2 faithful squatting in their parents moldy basements can cackle with glee.

Anyone that thinks T2 is concerned about “equality” has rocks in their heads. The Libs are broke, they need more money. Their supporters are the bottom feeders of Canada waiting for their meal ticket to settle in the sand, and if that doesn’t happen, taking away someone else’s plate will do just fine for these folks.

One more thing: I’ve always advised to those who have sacrificed and saved to avoid/eliminate as much taxation as possible. I now advise this to anyone who is male as well – regardless of their financial condition. Looks like T2 is going all the way…

#197 NoName on 07.31.17 at 11:37 am

Does your teen reds a news…

https://www.eff.org/deeplinks/2013/04/are-you-teenager-who-reads-news-online-according-justice-department-you-may-be

#198 Stan Broock on 07.31.17 at 11:39 am

It seems at the end that the T2’s gang is pursuing this campaign against private corporations, along with the other different useless agendas and unneeded fights (Canada is one of the most tolerant societies in the world already) not for real gains, but in mere attempt to divert attention from the coming economic collapse.

#199 jess on 07.31.17 at 11:41 am

Liberals try to assuage fears ahead of possible free trade deal with China, documents show

Ex-ambassador says Liberals ‘substituting hopes and aspirations for a solid plan’
Susan Lunn · CBC News · an hour ago
http://www.cbc.ca/news/politics/liberal-consultation-free-trade-china-1.4226562

What about:

U.S. crackdown on Hong Kong auditors lacks force
…”In 2011, many were embroiled in accounting irregularities, resulting in multiple delistings and billions of dollars of shareholder value destroyed. In many cases Chinese state secrecy laws prevented American regulators from double-checking their books.
The U.S. Public Company Accounting Oversight Board (PCAOB), created to police auditors after the Enron and WorldCom scandals, said Tuesday it revoked the registration of the Hong Kong affiliate of Crowe Horwath International because it did not help with an investigation. The auditor said China’s Ministry of Finance ordered it not to hand over mainland documents because the U.S. watchdog had not adhered to a 2013 memorandum that regulates cross-border accounting matters.

Under that non-binding pact, PCAOB is supposed to go through Beijing for such requests, instead of asking directly….Investors must be able to put their faith in issuers’ financial statements. If investors do not believe that the auditor is truly independent from the issuer, they will derive little confidence from the auditor’s opinion and will be far less likely to invest in the issuer’s securities. Fostering investor confidence, therefore, requires not only that auditors actually be independent of their audit clients, but also that reasonable investors perceive them to be independent…. Crowe’s Hong Kong member firm decided to sacrifice its U.S. business. It had already petitioned to abandon its licence last year, making the PCAOB’s disciplinary action mostly symbolic….U.S-China audit pact was intended to prevent future
scandals. But as Chinese companies keep listing in U.S. markets,the process looks increasingly inadequate. The PCAOB cannot conduct on-site inspections in China, and Beijing blocks access to papers it considers sensitive.

http://www.nasdaq.com/article/breakingviewsu.s.-crackdown-on-hong-kong-auditors-lacks-force-20170727-00029

#200 n1tro on 07.31.17 at 11:46 am

#127 Grooby on 07.30.17 at 10:01 pm

I used to be a incorporated contractor & income split with my wife. I had a definite advantage over full time employment, even with all extra costs. My wife did little to contribute to the corp and ‘earned’ a salary above national Canadian average. I don’t see how that’s fair to employed people who often did the same work.

So I take it that you are going to give back that ill-gotten money you gained from splitting with your wife? No? Why? Isn’t it the moral and “fair” thing to do?? Yeah, that’s what I thought.

#201 Another Deckchair on 07.31.17 at 11:49 am

Wow!

To all the MDs reading – ignore the trolls. They are the ignorant that you stitch up and send on their ways, who have *no clue* how the system works.

Try and stay here in Canada, please.

Yes, I know how going to the US is done, knowing MDs who have gone south (not to come back), and I would not blame you for doing such, especially after reading some of the comments here, and of the changes to the tax rules.

I don’t know what else to say, except “thank you” for all the hard work you have done – from delivering babies, to keeping people alive, to having to tell someone to their face that their days are numbered.

You have a tough, tough job, with back-stabbing from both the government, and from some of those you help.

Thank you.

#202 Ezzy on 07.31.17 at 12:02 pm

Re: Comment 182 Re., 53
“To all of the whiny old doctors…please, do us a favor and move to the US already.** it’s not the old ones that we should be concerned with, they’ve made their money and won’t be affected much by the changes, it’s all of the young ones who are doing as you suggest, and the foreign students who get a great education here and leave to other parts of the world. This comes from the mouths of a couple medical professionals working in different positions** Pay the ridiculous malpractice insurance rates, live in fear of litigation and deal with the realities of the free market **still worth it considering the pay, and medical practitioners here live with the same fear of litigation.** There will be many recent and foreign grads lining up to take your place” No, just no. Especially not with the soon-to-be taxation laws. Canada is not the beacon of shining light and economic opportunity that we want, so badly, to believe it is.

#203 Old Dog on 07.31.17 at 12:39 pm

I hear Mr. Trudeau is giving Winnipeg $35,000,000 to build a diversity garden. They will use plants to show Canada’s bio-diversity and multi-cultural heritage. It’s good to see tax payers hard earned money put to such projects. Yes, Canada is truly back. I have given up all hope that their is any common sense left.

#204 Maxwell C. on 07.31.17 at 1:08 pm

What’s stopping them from putting their money in a registered retirement investment plan?

Oh yeah, absolutely nothing at all. They can build the exact same RRSPs that literally anybody else who is a wage-slave can.

That was a non-point just aiming to score political points and while he is a former politician, I do expect a *little* better from Garth.

#205 M on 07.31.17 at 1:19 pm

Gartho baby, I don’t understand why are you so puzzled by whatever gov does these days.
Canada is a failed economy from many years back. What will be “new” is the confirmation of this fact.
It takes 20-30 years to put an economy in the ground. Now is time to pay the piper so to speak.
What gov does is only normal. It’s broke. Boyz know it.
Harper didn’t give the TFSA because he was a visionary…but because was realistic enough to know that pension plans mean squat and joe 6 pack might be able to do something with an insytrument like that.
The other direction is the one taken by T2.
Elementary Watson.
Something should dig: if the general ROI is less than 7% (in any long term folio) someone will have to make up the difference. Stealing comes in quick and handy.

#206 IHCTD9 on 07.31.17 at 1:19 pm

#76 ImGonnaBeSick on 07.30.17 at 6:54 pm
Also, #50 GTA Engineer, you’re obviously an idiot. Higher risks do not guarantee higher rewards, more often than not, it’s the opposite. Absolutely small business owners deserve incentive, and the only thing a government can offer is a tax break.
_____

I think the official number is 8 out of 10 new businesses fail within the first year and a half.

It’s amazing how many here are cheering the ideology of taking away from the successful few who make it out of the trenches, and giving it to… well, government. Makes me think that no one really cares what the money ends up doing – so long as it’s taken away.

That’s why I say, Trudeau is representative of most Canadian voters – ideologically driven at the expense of their own future prosperity – and totally clueless about the whole thing.

As others have said, future entrepreneurs who want to take home more for their effort are going to have to work double time just to net what a Cop or Firefighter would – but with none of the security, benefits, or pension.

BoomerKid at 35, she’s still NETTING less than a cop or ff, and buried in debt. While the FF’s are getting paid to sleep, BK is out working like a slave. She’ll probably be mid 40’s by the time she starts catching up. If T2 gets another round or two, she’ll retire well behind any teacher, cop, firefighter, bureaucrat, OPG staff, Hydro One lineman, politician, etc… etc.. etc…

Why bother? You have to assume these changes will be permanent, and that your prospects will only get worse given the demographics in Canada. Why go down that long road of endless work, mountains of debt, stress through the roof – just to get kneecapped every 2-3 years by the next PM/Premiere?

#207 Cal on 07.31.17 at 1:19 pm

I think the notion of doctors making their living off the back of hardworking middle class individuals is ridiculous. The other notion trotted out is that becoming a physician/dentist/lawyer entails no risk and is a free-ride to the good life. If it is so easy and so risk-free then all the whiners and T2 supporters would be doctors. Unfortunately, those that support these tax gouging measures are also part of the 95% who not only don’t have the grades, but lack the diligence, work ethic and interpersonal skills to get into medical school. (thank goodness!)

Cheer for all the crying, whining MD’s to leave for the US? Idiocy. I for one would rather be treated by the 5% most brilliant in our country, then watch them leave and be left with a guy who got into med school with a 3.4 GPA because all the smart ones left.

be careful what you wish for.

#208 Johnny boy on 07.31.17 at 1:27 pm

Don’t you love the type people Trump surround himself with. What intelligence, what experience, what class.

Anthony Scaramucci’s wife filed for divorced while she was nine months pregnant and, when their son arrived on Monday, he congratulated her by text message, according to a report in the United States.
Classy Mooch, very classy.

#209 InvestorsFriend on 07.31.17 at 1:30 pm

Why Invest more than 3% of your Equity exposure in Canada?

Some have suggested that 20% weighting in Canada is far too high given it represents 3% of global markets or whatever.

Well, maybe they have a point. Putting very minimal equity weight on Canada is feasible with ETFs. In my experience global investing in individual stocks would not be feasible it is harder and more expensive in fees to buy stocks not traded in Canada or the U.S. Many global companies do trade in the U.S often as American Depository Receipts but certainly most do not.

As an individual stock investor I have stuck with Canada and the U.S. and not gone this low Canada approach. (Each to his own.)

A big reason not to go way low on Canada is currency risk. But you can buy Canadian dollar hedged ETFs. And you should in fact probably take some currency risk for diversification.

Portfolio theory would (to my understanding) suggest a very low weighting to Canada and accepting a lot of currency risk. This for maximum diversification.

#210 Dale Cooper on 07.31.17 at 1:34 pm

Will they also do away with public sector pensions? You know, for fairness.

#211 saskatoon on 07.31.17 at 1:39 pm

wage gap myth discredited SO LONG AGO.

women earn less than men because they CHOOSE to earn less.

#212 InvestorsFriend on 07.31.17 at 1:40 pm

Why track a Global Portfolio in only Canadian dollars?

Okay, say you invest globally with only 3% of your equity allocation to Canada.

How should you then measure progress?

Why should you measure it only in Canadian dollars? Do you intend to only ever spend money in Canada and on things not tied to U.S. or other currency?

Maybe you should measure your portfolio in how much gold it will buy (for gold bugs) or in how many Big Mac’s it will buy (food for thought). Or in U.S. dollars, the world’s main currency.

If you put 30% into U.S. dollars why should you then measure that in Canadian dollars? especially if you plan to spend those dollars in the U.S. some day?

#213 Dale Cooper on 07.31.17 at 1:40 pm

The bicycle of spending other people’s money – looks like a wobble in the wheels to me. Targeting doctors = not enough bougie in Canadia.

#214 BC MD on 07.31.17 at 1:45 pm

Be careful when you say that foreign trained doctors are lining up to work in Canada – it’s true – they are. But very few are from countries like Britain, Austrailia, New Zealand (I’ll leave you to figure out why…). Most are from Russia, Eastern Europe, and the middle East. And in my experience, 90% of them are not nearly as well trained as Canadian physicians. Be careful what you wish for

#215 Braj on 07.31.17 at 1:48 pm

#11 The Technical Analyst, CSTA, CPD on 07.30.17 at 2:32 pm
This is one of the main issues (after working around the world) the bothers me most about returning home and working again in Canada.

Bolshevik style Socialism.

I have no issues with helping the lowest rise, but hand up not hand out.

Thanks to JT (or T2) Canada seems to only want to tax the successful and remove the motivation to be “better” when “average” is good enough.

Quite sad really as any student of history knows how Bolshevik style Socialism ended and benefited no one.

Dr. Jordan Peterson has spoken on this subject extensively and is arguably one of the most educated on the psychology behind how something like Mao’s China or USSR might arise.

The warnings have started for Canada, things such as Bill C-16, and now gender tax?

#216 SW on 07.31.17 at 1:50 pm

#23 cmccullo on 07.30.17 at 3:18 pm
“OK, I understand that folks are worried about the tax man. Let us all be vigilant, by all means. Still, may we vote that the next dog who compares us to Venezuela be shipped there for a few months of reality reprogramming? Let’s not lose our minds here, people.”

Agreed I had a private bet with myself that as a result of Mr. T’s post, within 20 comments someone would have spluttered “Bolshevism!” and someone else would have compared Canada to Venezuela or Cuba. I won…
Mr. Turner is a world-class troll attention grabber.

#217 Lee on 07.31.17 at 1:51 pm

#201 Saskatoon,

I DON’T WANT MORE MONEY. PAY ME LESS THAN A MAN.

I don’t know. Kind of hard to believe any rational woman would say this.

#218 IHCTD9 on 07.31.17 at 2:06 pm

#166 BC MD on 07.31.17 at 3:07 am
I’m a specialist doc in a medium-small BC town, and the only specialist of my kind in town. I just graduated residency a couple years ago, and just finished paying off my debt. I haven’t bought a house yet (still renting Garth!).

If these proposed changes go through, then I’ve had it with working in Canada. What’s the point in staying here, and moreover, what’s the point in working hard? There are plenty of other countries with better compensation, lower taxes, and more affordable real estate markets. That all equates to a better quality of life for me and my family. It’s too bad as well, the Canadian tax payer subsidized my 13 years of education and won’t see any of the benefit.

It’s too bad for my town though, they won’t be able to replace me anytime soon.
__________________________________

You might want to hold off and see how it plays out – one thing I notice about Canadian enforcement is it’s slow, lax and weak. Being a Doc in a small town BC city sounds like it may have a lot of benefits. Big income in a low cost area – especially as nice as BC is worth not tossing in the trash quickly. Talk to your accountant, or financial advisor, they’re already working on ways to get around it.

BUT, if it all plays out like it sounds, I agree – you may as well gtfo. It’s only going to get worse here, most Canadian youth feel like they got screwed and can’t stand the sight of anyone doing well for themselves. They’ll vote for anyone who promises “that” kind of “equality”. Politicians like T2 are a multi decade reality from here on in, it’s going to take something big and all encompassing to bring change. If Gen Z is anything like the Millennials, I won’t even live to see a change and neither will you. Might as well plan for the long run…

#219 InvestorsFriend on 07.31.17 at 2:27 pm

Yes, Already Taxed Money is Subject to Tax When reinvested for gains.

Any talk or thought that there is or should be no tax on gains made from reinvesting after-tax already-taxed money is sheer nonsense and wishful thinking.

With rare exception ALL investments are made with after-tax money.

RRSP is an exception where you get to invest pre-tax money but effectively the government then has funded and will later take back roughly 40% of your RRSP.

But never mind the exceptions, the RULE is that you have no other kind of money but after-tax already-taxed money and of course gains on that are subject to tax.

If already-taxed money could normally grow tax free then the rewards to saving and investing would be enormously larger than they are today. The 1% would love it.

#220 MF on 07.31.17 at 2:32 pm

#214 BC MD on 07.31.17 at 1:45 pm

Not wishing for anything and don’t want you to leave. Foreign doctors, I will give you that..but there is a million undergrads desperately trying to get in to medical school.

MF

#221 n1tro on 07.31.17 at 2:38 pm

#217 Lee on 07.31.17 at 1:51 pm
#201 Saskatoon,

I DON’T WANT MORE MONEY. PAY ME LESS THAN A MAN.

I don’t know. Kind of hard to believe any rational woman would say this.

All things being equal, women choose to get paid less when they sacrifice time/money going on maternity. To include a woman’s maternity money in the average with a man who is getting full rate and calling it as a part of the “wage gap” is the myth which liberals like to spout. eg. A woman only makes $0.78 compared to a man. The gap is closer to $0.95

#222 Renter's Revenge! on 07.31.17 at 2:53 pm

#209 InvestorsFriend on 07.31.17 at 1:30 pm &
#212 InvestorsFriend on 07.31.17 at 1:40 pm

It seems like most people who argue for market cap weighted index investing put the cart before the horse. According to that theory you would only invest 3% of your funds in canadian equities. It’s just a theory though, but some people treat it like dogma. Gurus like John Bogle, Charlie Munger and Warren Buffett say that you should use index funds IF YOU DON’T KNOW WHAT YOU’RE DOING. I use index funds for foreign equities because I know I don’t know what I’m doing. On the other hand, if you see an investment opportunity, then to hell with market caps. For example, people who own private businesses are clearly not indexed, or even diversified! Besides, there are obvious disadvantges to indexing, such as buying more of what’s high and less of what’s low. Canada’s low weighting in the world could represent undervaluation, lack of investment and/or investment opportunity. And to paraphrase Buffett, you should measure your progress by how much you increase your purchasing power, wherever you want to spend your money.

#223 HDJ on 07.31.17 at 3:00 pm

Our government needs to take steps to solve the problem of wealth inequality in Canada. We’ve reach this point because prior governments set up tax structures that favoured the wealthy, period. Twenty percent of Canadians now possess seventy percent of the wealth, and that’s causing all sorts of problems throughout society. Three cheers for our current Liberal government. The sorts of changes they’re putting forth are long overdue.

#224 jess on 07.31.17 at 3:01 pm

the rich got rich from taking on risk”

rlly…what about the 2 and 20% crowd with deferral

you know the ones trump referred to on his campaign

=
hardline in on n. Korea
https://www.bloomberg.com/news/articles/2017-07-31/trump-removes-scaramucci-from-communications-director-job-nyt

#225 BC_Doc on 07.31.17 at 3:03 pm

#53 Millennial Investor on 07.30.17 at 5:23 pm
I can appreciate providing tax breaks for small business that create jobs, but becoming an MD, billing OHIP and ‘hiring’ your extended family does not equal entrepreneurship.

To all of the whiny old doctors…please, do us a favor and move to the US already. Pay the ridiculous malpractice insurance rates, live in fear of litigation and deal with the realities of the free market. There will be many recent and foreign grads lining up to take your place :)

—————————————————————

Move to the US to work? No thank you. But I may take my Canadian medical school education/degree and shut down my practice early. Need a physician to look after you and your family? Sorry, no doctors taking new patients where I live in Beautiful BC. But as you pointed out, there’s lots of foreign doctors wanting to move here. Maybe T2 will bring in a doctor from Havana or Uzbekistan to take care of you. Good luck with that.

BC_Doc MDCM

#226 Prairieboy43 on 07.31.17 at 3:21 pm

Knew a Dr. From India, working in small town Saskatchewan. He had a good practise going. Then he went insane. He was angry, and shot out town lights. Did year community time. Not sure if it was taxes, 24 hours workload, or no relief for himself and family. Sold his practise, to and unsuspecting greater fool
(rinse/repeat).

#227 jess on 07.31.17 at 3:22 pm

at a hedge fund conference where he once played host, Mr. Scaramucci called HNA “one of the more magnificent conglomerates coming out of China.”
========================
Behind an $18 Billion Donation to a New York Charity, a Shadowy Chinese Conglomerate

https://www.nytimes.com/2017/07/26/business/hna-group-billion-donation-new-york-charity.html

In January, Mr. Scaramucci announced that he had sold Skybridge to a consortium led by RON Transatlantic and HNA Capital, an arm of HNA Group.

#228 Mike on 07.31.17 at 3:31 pm

.
Interesting, how asking to pay fair tax and stop paying fake wages to spouses and kids, is landing me in a ‘doctor hater’ section.

Guys, stop paying fake wages to spouses and kids. Use ways available to everyone RRSP, TFSA. Oh, that’s not enough. But that is enough for middle class wage earners?

And, to those saying’go start a business’ –> ‘You go become an employee’. Nobody stopped you to do that. Then you can get all the pensions and benefits you are blaming I am getting. Go do it, become an employee or move south. Both options open.

#229 Cashed out in Vancouver on 07.31.17 at 3:31 pm

Welcome to BC (Bring Cash)
GST/PST, CPP, Medical Fees, Personal Income Tax, Corporate Tax, Carbon Tax, Fuel Tax,
Property Transfer Tax, Land Tax, Liquor Tax, Tobacco Tax,
Municipal and School Taxes, Import Duty,
Container Recycling Fee, Bridge Tolls, Environmental Handling Fee (EHF), Death Tax…and now Tax Fairness ?

#230 Dan.t on 07.31.17 at 3:32 pm

http://www.cbc.ca/news/canada/british-columbia/i-am-done-with-public-life-says-christy-clark-in-first-public-statement-since-resignation-announcement-1.4229207

Of course typical bias “news”, great article and all comments banned or not allowed. That happens often with CBC “news”… don’t let people say what they really think, especially on topics that are really important to them…like maybe affordable housing and…actually, I won’t even bother, it’s all good in BC

Way to leave BC better than you found it (sarcasm), i hope the NDP can piece it back together. And if you disagree try being under 30 and starting a life in YVR or surrounding areas…get used to the basement suite… or do I see that wrong?

#231 Leo Trollstoy on 07.31.17 at 3:49 pm

It’s too bad for my town though, they won’t be able to replace me anytime soon.

Don’t worry about it. Society seems to get by either way.

#232 young & foolish on 07.31.17 at 4:04 pm

“A house of cards it seems.
Canadian economy’s addiction to real estate fees is ‘stunning,’ says analyst”

Hmmm … you think so? The economy is shifting, to services, and is so reflected here. Remember, at one point most people worked on the farm. The shift to manufacturing and urban dwelling must have seemed scary to many, and some would have said “things will eventually go back to normal”.

#233 Millennial Investor on 07.31.17 at 4:08 pm

Garth, how do you suggest the govt fund their deficit spending without taxing corporations? Should Starbucks baristas be made to pay more so we don’t inconvenience the opthamologists and radiologists who’ve grown accustomed to their lavish lifestyles?

#234 Viesia on 07.31.17 at 4:12 pm

Be careful when you say that foreign trained doctors are lining up to work in Canada – it’s true – they are. But very few are from countries like Britain, Austrailia, New Zealand (I’ll leave you to figure out why…). Most are from Russia, Eastern Europe, and the middle East. And in my experience, 90% of them are not nearly as well trained as Canadian physicians. Be careful what you wish for

I have to disagree with you. I am from Easter Europe and their doctors are excellent. They are very highly trained and sometimes prescribe vitamins which Canadian doctors NEVER do.

#235 WUL on 07.31.17 at 4:14 pm

Of course a large number of small businesses fail. A lot of them are really bad ideas.

#236 NoName on 07.31.17 at 4:18 pm

Darpa announced tender for BS detector, mooch gets canned. What say you SM?

#237 Answering Some Questions on 07.31.17 at 4:19 pm

There’s lots of comments made by people who don’t understand small businesses, doctors, etc. Here are some answers and food for thought

— re: Paying ‘fair’ share vs salaried employee
As part of doctor’s negotiation of fees, small business incorporation was part of the compensation. For example, your total compensation includes your base salary, vacation days, stat holidays, benefits (including EI/CPP), pension, and bonuses.

The tax benefit is PART OF THE COMPENSATION, not a bonus reward. Mark my words – doctor groups will demand higher fees to compensate for higher taxes.

And it’s not just doctors. Same with everyone else.

— re: risks of a doctor
Like any other business, your risks are office risks. The secretary and other hired help, the leases, you name it. At work, you get sick days, as a business owner, you don’t show up, you don’t get paid. Patient is a no-show, you don’t get paid. Flood, fire, theft, you don’t get paid. Or, how about 15 years in school, 300K in debt, and risk of not passing your exam? There are so many more examples.

— re: subsidized training
If you actually look at what is involved in doctor training, you’ll quickly realize they work 80 hours/week and paid something like 40K/year. Take away that 80 hours/week, and it would have to be done by full-time staff. You’d now have to replace cheap labor with expensive labor. Governments, by training doctors, actually save money despite it being “subsidized” training.

— re: higher fees
It’s not just doctors… let’s look at independent IT Contractors. They charge about $60-80/hour, which translates to about $130K/year working about 48 weeks. This same person in the full-time market would demand about the same salary full-time (after bonuses and benefits), but before stat holidays, sick days, and job security.

Therefore, again, tax benefit is PART OF THE COMPENSATION. I would fully expect these contractors to raise their rates or leave contractor all together.

Now rinse and repeat for all the other professionals.

— re: end result
Some will leave the country.
Many will work less. Do you want your doctor to work less so you can have a 1 year wait list?
Many will raise their fees.

#238 april on 07.31.17 at 4:28 pm

# 201 – Fully agree!

#239 yup on 07.31.17 at 4:42 pm

I’m a specialist doc in a medium-small BC town, and the only specialist of my kind in town. I just graduated residency a couple years ago, and just finished paying off my debt. I haven’t bought a house yet (still renting Garth!).

If these proposed changes go through, then I’ve had it with working in Canada. What’s the point in staying here, and moreover, what’s the point in working hard? There are plenty of other countries with better compensation, lower taxes, and more affordable real estate markets. That all equates to a better quality of life for me and my family. It’s too bad as well, the Canadian tax payer subsidized my 13 years of education and won’t see any of the benefit.

It’s too bad for my town though, they won’t be able to replace me anytime soon.

…………….

and there are delusional people that think specialists will be rolling from other countries into Canada…………………… True story

#240 Jack on 07.31.17 at 4:44 pm

There will be no exodus of doctors to the south. Whoever tell you this will happen is just using scare tactics. Doctors’ life style is not better in USA than in Canada, especially for primary care (family doctors, internal medicine, etc.). Payment is guarantee in Canada. What other business have guarantee payment and almost guarantee business? Yes doctors have long training, but they get paid handsomely, there is no reason why they pay half the tax rate as their poor secretaries making $18 an hour.

#241 dr. talc on 07.31.17 at 4:46 pm

pointless debating left or right
there’s only one side

what could be more conservative that a neo-con,
nothing right? they were on the Bush team
but they are Trotskyites
read William kristol’s bio and that of his father irving kristol
there was no ‘workers uprising’ in Russia, the Russian system was held together with terror
the Frankfurt school knew there was too much public aversion to names like communism, Bolshevism, Marxism whatever, and general acceptance of these philosophies was impossible, so they settled on a new name, Democracy to dupe the general public, it still works to this day

#242 lol on 07.31.17 at 5:10 pm

Garth, how do you suggest the govt fund their deficit spending without taxing corporations? Should Starbucks baristas be made to pay more so we don’t inconvenience the opthamologists and radiologists who’ve grown accustomed to their lavish lifestyles?

…………..

this IS the mindset of a good % of Canadians. tax the ‘rich’. The Bernie Sanders crowd…

#243 RyYYZ on 07.31.17 at 6:37 pm

#158 MF on 07.31.17 at 12:34 am
Go become a firefighter and run into burning buildings, or policeman and risk being shot at every day by the scum of society if you want that “gold plated pension” yourself.
===================================

Oh, rubbish. People are practically beating down the doors of police and fire services to get into those jobs. They were even 40 years ago before their pay and benefits got so far ahead of the average working stiff that pays the taxes that pays for them. You could easily fill and keep these jobs staffed with considerably lower compensation than they get now.

A concept familiar to pretty much anyone who works in the private sector who gets paid largely on the basis of supply and demand. Those jobs aren’t nearly bad/dangerous that you need to offer such rich compensation to fill them. You want a dangerous job? Try underground coal mining, or deep sea fishing, or taxi driving, or working at a late-night convenience store. The first has barriers to entry (you need experience to get hired on to a crab fishing boat, for example) and is the only one that is fairly well-paying. The second has only OK pay, and the last two are really poorly paid.

In the real world, the types of jobs that offer $100k+ in salary along with good benefits (never mind the pension, because pretty much nobody in the private sector gets DB pensions anymore) require significant training (typically at least a bachelors degree) and experience. They’re not the kind of jobs that you get as a fresh-faced 21 year old with a year of community college.

Outside the civil service, our society does not pay for jobs on the basis of how uncomfortable, demanding, dangerous, etc, they are, but largely on the basis of supply and demand. As a taxpayer, I don’t see why the government has to concern itself over the plight of its employees any more than any decent private employer. Or to put it another way, I can’t see why the government should be any more generous of an employer than the average private-sector employer.

#244 tomohawk52 on 08.01.17 at 6:28 am

#201 Another Deckchair on 07.31.17 at 11:49 am
Wow!

To all the MDs reading – ignore the trolls. They are the ignorant that you stitch up and send on their ways, who have *no clue* how the system works.

Try and stay here in Canada, please.

Yes, I know how going to the US is done, knowing MDs who have gone south (not to come back), and I would not blame you for doing such, especially after reading some of the comments here, and of the changes to the tax rules.

I don’t know what else to say, except “thank you” for all the hard work you have done – from delivering babies, to keeping people alive, to having to tell someone to their face that their days are numbered.

You have a tough, tough job, with back-stabbing from both the government, and from some of those you help.

Thank you.

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Well said. I couldn’t agree more.

#245 Livin Large on 08.01.17 at 10:10 am

“That’s why you get a tax credit for making an RRSP contribution, for example, because without that carrot far fewer people would save…”. Well, this certainly seem to be factual…there is the carrot but where is the hammer that always accompanies the carrot?

Considering that the RRSP concept has been rather surprisingly static for ages, might the feds of every political stripe also recognize the “reality” that the RRSP is a wonderfully simple method to guarantee higher tax revenues at a very predictable future date? Their rules control the maximum you can put into a RRSP and even dictate when and how you can take the $$ out. And then there is that fiscal “magic” of the RRSP converting every $ of an RRSP into the highest taxed revenue type as it exits the RRSP regardless of the income type it was while in the RRSP?

The TFSA rules have changed far more than RRSP rules and TFSAs are infants compared to RRSPs.

Remember the Reform Party PM dressed in PC frocks doubling the TFSA contribution limit simply to “buy” votes in an election year?