The rich & the rest

Forget all of the class warfare, the anti-business sentiment, the sniping between bosses and workies and the anger people feel about their financial struggles. Here’s the big question: why’s there such a disparity of wealth?

It’s endemic now. This eat-the-rich sentiment has allowed the Trudeau government to punishingly increase taxes on the successful (people making over $225,000 a year), gut the TFSA (because only the rich can find $10,000 a year to invest) and now propose draconian new levies on small business people, docs, lawyers, IT dudes and entrepreneurs who create half the jobs.

If the comments on this pathetic blog again yesterday indicate anything (God have mercy if they do) a broad swath of society believe anyone making decent money, income-splitting with their spouse, driving an Audi, owning two houses or operating a company is the enemy. The solution, they say, is to tax the crap out of them. There should be no advantage given to anyone who trades risk, pension, health benefits or security for more cash flow. Drop the hammer, Justin.

So where did this come from? Just to our south, rich guys are celebrated. They elected the ultimate one to be leader. He’s about to cut corporate and personal taxes, including for the wealthy. And the deplorables cheer.

Seems Canadians are different for a few reasons. It’s estimated that 55% of Americans have exposure to the stock market, for example, whether through direct equity ownership or assets like ETFs. The thing of choice for a 401k (the main US retirement saving vehicle) is a stock or equity fund. In Canada most money in RRSPs and TFSAs is cash or GICs. Only 19% of Canadians have stock market exposure. But, of course, 70% of us own houses. For the Boomers it’s closer to 85%.

Homeownership rates here have been inching upwards for a generation, even as houses get stupid expensive. In the US the proportion of people owning has fallen to a 25-year low of barely over 60%, even when houses cost (on average) half what they do here. In the decade since the American real estate market blew up, the divide has sharpened with Millennials there preferring to rent, while the Moisters here stay ravenously house horny.

As a predictable consequence: Canadians have never owed as much money, and debt continues to grow at three times the inflation rate. US household debt has been steadily decreasing. In Canada, it seems, we equate mortgages with wealth. Leverage is smart. Real estate’s riskless. And we trust nothing but dirt. And debt.

Now here’s the point of distinction, which governments conveniently ignore. It’s the nature of wealth that is widening the gulf between the 99% and the 1%. The masses are addicted to real estate in a cult-like trance, fed by cheap rates, abundant credit and pro-housing policies. But over the course of a lifetime – any lifetime – growth assets like equities have outperformed housing as a generator of wealth, with more liquidity and far less cost. Canadian real estate has appreciated over the past thirty years by an average of 3%. Stocks have advanced more than 7%. The cost of buying and selling real estate is huge compared to financial assets. And the massive leverage required (we have $2 trillion now in mortgages) means exaggerated losses when markets decline, as they now appear poised to do.

Has housing made some people rich with windfall gains? Of course. In a limited time, and in isolated markets. But unless those properties are sold, at the correct moment, releasing the gains, the wealth is trapped – providing no dividends, interest or distribution cash flow. In other words, this is wealth not creating more wealth, and 100% prone to market fluctuations. Risk, risk, risk – especially when purchased with credit credit and during times of asset inflation.

Meanwhile wealthy people have adopted a different approach. Instead of owing the debt, they own it.

Wealthy people – the 1% in terms of income (above $225,000) and assets (over $1 million in liquid wealth) – own a disproportionate amount of financial assets. Stocks, funds, preferreds, bonds, trusts plus business equity. Unlike the middle class, where the bulk of net worth is buried in one asset on one street in one city – subject to market volatility, interest rates, the economy, local employment, zoning, property taxes and buyer emotion – this provides a far broader diversification, plus balance and liquidity. Over the sweep of adulthood, it forms a more predictable, effective, efficient and predictable way to grow wealth.

In other words, the rich hold assets, the rest have debt.

That chart above is the work of US economist Ed Wolff, who found that over 70% of the wealth 1%ers have is in financial assets, while for the middle class the number is 12% (and more than 60% is in one place – a house).

Because broad economies always grow (with recessions being the rare but predictable exception), yet real estate markets are massively influenced by local factors and irrational hormonal sentiment, the wealthy have experienced a steadier, more predictable rise in net worth. Moreover, keeping your dough in liquid financial assets means you can gain exposure to global growth, and are not locked into local conditions as with a house. It’s also possible to generate cash flow, usually tax-advantaged, which can be invested in more stuff.

Compare that to middle-class Canuck households, where surveys tell us 50% live paycheque-to-paycheque and a third are already hurting because of a minor quarter-point interest rate bump. Yup, lots of them are ‘wealthy’ because of the equity trapped in their homes, but they have debt and little money. Not a stable long-term strategy.

All forms of investing carry risk, of course. But not the same kind. As indebted homeowners in Toronto (and soon Vancouver) are discovering, there’s a reason they don’t feel rich any more. They never were.

 

237 comments ↓

#1 Dave D on 08.30.17 at 5:15 pm

Looks like we will be stuck with that idiot Trudeau in power for the rest of his natural life. Not enough ‘small business owners’ getting screwed by his new taxes to vote him out.

#2 Big English on 08.30.17 at 5:16 pm

Early, educational and philosophical.

Take the rest of the day off.

#3 Buster Baxter on 08.30.17 at 5:22 pm

You are early today, Garth. And I am first!! Great article BTW.

#4 Lee on 08.30.17 at 5:30 pm

Wolf’s blue and gray chart is meaningless. You can’t compare the house buying habits of poor and wealthy people. You can only compare how people in close proximity to each other in total wealth spend on housing and how that effects their relative wealth in the long run. If I have $10M and I buy a mansion for $3M, am I a smarter investor than the guy with $1M in wealth who buys the $500,000 house? I get angry every time I see this chart because it suggests wealthy people are wealthy because they invest in financial assets. I believe what is really happening is the wealthy get wealthy first doing something else, and then they turn to financial assets. Somebody should do a study on that.

#5 MF on 08.30.17 at 5:32 pm

The wealthy still have to live somewhere though. Do they rent the homes they live in, or buy them outright?

We they gifted from previous generations?

I think it’s more complicated than just “the wealthy invest”.

Debt levels are so high not only because people believe houses will go up forever (so far they have been correct), but also because in order to purchase at today’s prices most people have to take on debt.

It’s a vicious cycle.

MF

#6 Ian on 08.30.17 at 5:43 pm

Canada will exactly follow the US path in that graph. April will mark the high water mark for debt to income, and down it goes. Should be multi-year just like the US. Can’t happen soon enough.

Our governments need to do the same to get our ridiculous 436% debt to GDP ratio back into the land of the living.

#7 Keith on 08.30.17 at 5:44 pm

Between 1945 and 1980, the vast majority of working people went from living in slums and poverty, to fully fledged members of the middle class. Even if you didn’t have post secondary educations, skills, or even your grade 10 you could get a living wage for a family, own a home and get a modest pension. There were unskilled union gigs that paid well and productivity increases were shared with workers with raises in real terms and reduced workweeks.

Since 1980, benefits of economic growth have inexorably gone more and more to less and less people. Slowly, wages stagnated, pensions were replaced with inadequate defined contribution schemes, benefits were shaved. Workweeks for the salaried increased, and the underclass who didn’t make a proper living increased, slowly at first and then faster as capital and technology replaced labour.

People didn’t need to invest in the market, between cash returns of 6 – 20% government guaranteed and a company pension plan, the stock market was widely regarded as a crooked gamble by my parents generation. Nobody invested, their first exposure was five free BRIC shares from the B.C. government. Being frugal, and risk averse, and paying off your mortgage early was rewarded. People have no clue how markets work and how to benefit from them.

Working people have taken a thirty year slow beating that has taken the elements of working class wealth away from them. Now in some parts of Canada they are financially out in the cold. Even of those who own homes far too many are using the equity as an ATM. It would shock my grandparents to see people financing day to day lifestyles on their equity.

People know instinctively that the economy has grown, and they were stiffed by many in society. Greedy CEO’s, greedy business owners, smug union leadership and some not all union members. Now they want to even the score through the tax system. Not because it’s necessarily right or fair, but it is perceived to be. Working and middle class people are worse off than they used to be, and a few are making out like bandits.

Economic justice via the tax system. It’s all people have left, bearing in mind Trudeau senior cut the top marginal rate from 84% down to 56% in 1972 or so. Makes me laugh when people call him a socialist. He was, except when he wasn’t. Anyone offering a better way to assuage the middle class? Shall we expand unions? Mandatory profit sharing? Legislate a 32 hour workweek? Increase the minimum wage? If we continue the path of stiffing people, they’re going to be really expensive for the taxpayer when they get old.

#8 Blacksheep on 08.30.17 at 5:46 pm

Garth,

All this talk of small business tax increases, home values deflating and beneficial dividend rates has got me thinking…..

1) If I was to enlist your services with the sum of one million, How much in annual $ returns could I expect? We hear 6-7 % all the time, but what is the straight goods, post all fees for your services?

2) What tax rate would I / we (spouse) incur, being in BC, assuming I / we have zero additional annual income, if relevant ?

3) Baring the above, can you buy your way into the US? Will the US welcome me and my paltry sum of beaver bucks into the fold? Is there away around the: Invest $500 k / hire 10 workers plan?

#9 FLHTK on 08.30.17 at 5:48 pm

Yup pretty soon as rates rise 4 to 6 more times in the next 2 years people will be throwing the keys at the bank because their houses will have dropped in value and they won’t be able to afford their 800k townhouses. Sad but probably true.

#10 Lee on 08.30.17 at 5:50 pm

#1,

There are probably over 2 million professionals and entrepreneurs who directly or indirectly benefit from the tax laws being scrapped, not including their family members. That is more than enough to make up the vote gap. Trudeau had 1.3M more votes. That means that you only need to switch 600,000 voters from L to C, assuming no Liberal votes turn NDP to defeat the Liberals, let alone just prevent their majority from being repeated. My guess is 300,000 votes switching from L to C would end the L majority.

#11 Slackbus on 08.30.17 at 5:59 pm

Read any of the FI blogs (financial independence) and you’ll see people who became wealthy through investment assets, not house debt or their parents.
why even be on this blog if you don’t believe in wealth accumulation though prudent market exposure? It’s kinda Garth’s wheelhouse…

#12 TheDood on 08.30.17 at 6:02 pm

#4 Lee on 08.30.17 at 5:30 pm
Wolf’s blue and gray chart is meaningless. You can’t compare the house buying habits of poor and wealthy people………
____________________

Yes you can! Lots of rich people come from poverty. Lots of them become rich because they ignore what the lemmings are doing and become financially literate – like rich people. Anyone who is financially literate would know that planting a majority of one’s net worth in real estate is risky. Just ask anyone currently sitting on a huge mortgage in GTA or YVR.

#13 young & foolish on 08.30.17 at 6:02 pm

“Only 19% of Canadians have stock market exposure.” – GT

Whaaaat? How can this be? Everyone with a company pension has equity exposure, no?

#14 Renter's Revenge! on 08.30.17 at 6:05 pm

#4 Lee on 08.30.17 at 5:30 pm
“If I have $10M and I buy a mansion for $3M, am I a smarter investor than the guy with $1M in wealth who buys the $500,000 house?”

Yes.

“I get angry every time I see this chart because it suggests wealthy people are wealthy because they invest in financial assets.”

The chart doesn’t suggest anything. It just shows where people of varying degrees of wealth hold their wealth. And the point of this post is that since people who get and stay wealthy are probably doing something right, maybe you should emulate their behavior as best you can.

#15 Doug t on 08.30.17 at 6:05 pm

Let me tell you how it will be
There’s one for you, nineteen for me
Cos I’m the taxman, yeah, I’m the taxman

Should five per cent appear too small
Be thankful I don’t take it all
Cos I’m the taxman, yeah I’m the taxman

If you drive a car, I’ll tax the street
If you try to sit, I’ll tax your seat
If you get too cold I’ll tax the heat
If you take a walk, I’ll tax your feet

#16 Mean Gene on 08.30.17 at 6:05 pm

Hopefully communism doesn’t come back in vogue.

#17 cynical millenial on 08.30.17 at 6:07 pm

I don’t think it’s surprising to anyone that the rich own more financial assets. The reason my generation is barking about it is the gap continues to widen. Anyone whose played monopoly or reads this blog knows that having wealth begets more wealth.

The question is whether we want to live in a society where the gap continues to widen. Many of us say we don’t, and see increasing the tax burden for the people who hold the wealth as one of only a few practical options.

Does Garth have any policy ideas to stop the widening divide between the 1% and the rest? I’d love to hear them.

Sure. Do what his blog implores you to do, and has shown you how. — Garth

#18 Willy H on 08.30.17 at 6:07 pm

The middle class is dying because of:

>wage stagnation
>under-employment
>automation
>career log-jams as Boomers stay in their upper mgt positions well past 65
>cost of post-secondary education
>skills mismatch with good jobs
>health insurance costs (particularly the USA)
>the marriage of couples in the same economic strata which concentrates increasing amounts of wealth in among fewer families

http://fortune.com/2016/07/13/middle-class-death/

http://www.businessinsider.com/walmart-invests-as-american-middle-class-shrinks-2017-3

http://economistsview.typepad.com/economistsview/2008/04/the-coming-coll.html

This is impacting public policy and taxation because we have no other choice. Unless, of course, we want to delight in watching our society and community descend (in slow motion) into a northern version of Rio de Janeiro.

This is why there was so much blow-back against increasing the TFSA annual contribution levels a few years ago. In theory TFSA’s were structured to benefit all but in reality this has not panned out.

TFSA’s are a gift to Canadians and I am lucky enough to be able take advantage of this gift. Many are not so lucky.

The vast majority of lower middle class and working poor cannot save for their children’s post-secondary education let alone their retirement.

#19 Mike on 08.30.17 at 6:09 pm

.
Incomes haven’t increased proportional to inflation(including housing).

Middle class is taxed to death, while upper middle class and wealthy allowed all kind of loopholes to avoid taxes. Middle class only get 55% of paycheck after paying for taxes, this and that deductions. Rich saving all that money under corporation umbrella.

What else is expected other than society under debt, while rich save their money in corporations and pay dividend tax on their incomes, and expense the sh*t out of their personal spend.

Middle class don’t get to expense dinners, and sprinkle income with spouses/kids to expense it.

No wonder society is all divided. And then we say you are jealous……..Ha. Actually rich are jealous if they see middle class raising voice. How come that poor get a $1 raise in wage if I dont get to make $100,000 extra and get to cheat on my taxes?

I paid the corrupt politicians, not them.

#20 Joe2.0 on 08.30.17 at 6:11 pm

Who would want to live in Toronto?
Really.
Vancouvers full of ex Torontonians who would never go back, hot muggy, cold windy, polluted lakes..
Who cares if it’s the centre of the universe.
It’s different in Vancouver and the market proves it.
As do the surrounding burbs.

#21 Fran Deck Jr. on 08.30.17 at 6:11 pm

https://www.cnbc.com/2017/08/30/trump-on-tax-reform-i-dont-want-to-be-disappointed-by-congress.html

Unlike the commies in Ottawa, President Trump will cut personal and corporate taxes as he has pledged to do because lower taxes stimulate economic growth and makes people (Americans) very happy … Canadians are mostly brain-damaged as evidenced by many of the fake comments on this blog … Morneau and TREB must be hiring unemployed RE agents to post comments about how it’s a great time to buy a million dollar house in Aurora and why higher taxes are fair because we’re Canadian and we love our government services … there’s a reason why everyone in Canada is miserable and suffering from mental illness just as they are in Cuba and Venezuella … And don’t tell me about GDP and how we’re outperforming other G7 nations … Canadians live hand to mouth and it’s going to get much worse … taxation in Canada is excessive and punitive … excessive taxation is the reason Canadians use food banks and children go to bed hungry … and anyone who disagrees is being paid to post their fake comments.

God Bless President Trump

#22 FOUR FINGERS WATSON on 08.30.17 at 6:12 pm

Canada used to be a great country but Turdo #1 killed it. Turdo #2 is picking the corpse clean. How does someone get a majority government with 39% of the popular vote? How did we get it so wrong? We are screwed for a very long time. I only live here part time now and I’ve advised my kids to to cash out their McMansions and head for the US.

#23 Grey Dog on 08.30.17 at 6:17 pm

To Garth’s young pups:
SAVE SAVE SAVE while you are young, brown bag it, eat 99% of your meals home cooked. INVEST INVEST INVEST…thanks to compounding when you hit age 65 1M$ will be EARNED by you.
Mind you this advice is coming to you from a grey dog that doesn’t own a smart phone. Sacrificing…is a way to prosperity.

#24 Stone on 08.30.17 at 6:23 pm

I qualify an asset as something that pays me something to hold it, be it dividend, capital gain, interest income, a business generating revenue, etc. If it doesn’t, It’s not an asset but a liability or a toy.

I’ve seen 2 measures of wealth. The first is to only consider marketable assets excluding the principal residence, car, boats and other toys. The second includes them. I subscribe to the one that doesn’t include the principal and the other toys. I never understood the other one including all those things. After all, they’re money pits and they depreciate. Year after year, you throw money into a house and there is minimal payback in equity appreciation at 3% per year per Garth (if you’re lucky).

Was the second definition brought in solely to make the sheeple feel better about themselves? Consume! Consume! It’s all good. Keep lying to yourselves.

With renting, I know that my housing is a consumption item. Same for a car and the other toys. I’ll admit I was a fool at one time but not anymore. I love my dividends and capital gains. Even the interest income is nice. I don’t discrimate. I love you, balanced portfolio!

#25 AB Boxster on 08.30.17 at 6:25 pm

Canadians put down $50 k of subprime borrowed funds on a $1 million overpriced house, and then look down on renters, because they ‘own’ their own home, and renters don’t.

Actually, no.
You will ‘own’ your further depreciating pile of OSB and MDF, after 25+ years, and an outlay of around $1.7 million after tax bucks.

Until then you are just ‘renting’ it from the bank.

#26 Palpha on 08.30.17 at 6:25 pm

Every public sector employee is one of the 1%. A 40,000 pension at age 62 would cost you $1 million if you bought an annuity. Of course it would not be indexed to inflation like the government one and it won’t have any of the many benefits like massages and physiotherapy or dental etc. Don’t take risk. Get a government job.

#27 Penny Henny on 08.30.17 at 6:26 pm

If the comments on this pathetic blog again yesterday indicate anything (God have mercy if they do) a broad swath of society believe anyone making decent money, income-splitting with their spouse, driving an Audi, owning two houses or operating a company is the enemy. The solution, they say, is to tax the crap out of them.-Garth

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

wow Garth either you are not listening to the reaction in the comments or you are making this stuff up. Many of the poster’s here have a problem with income sprinkling where there is no actual work at the said company to merit this pay.

Be is legal or not as it stands now does not matter. It is not right.

#28 Dr. Eisen on 08.30.17 at 6:29 pm

I’m troubled by the way you speak about Canadians that way, Garth.

97.9% of land in Canada is inhabitable, and further development is restricted in the Greenbelt, so house prices only have one way to go -UP!

owning a home in Toronto or Vancouver is the Canadian patriot way for our country.

Marrying an independent career-oriented spouse and driving a $95,000 2017 model of Mercedes or Porsche SUVs IS THE CANADIAN DREAM that 350,000 immigrants strive for in our great country.

If you were my patient, I would sign a Form One so that I can have you evaluated under the Ontario mental health Act.

No one should badmouth Canada, because we are the greatest country in the world.

Toronto is ranked #1 by The Economist as the best city in the world to live in.

Demand is greater than supply in Toronto…our great city of Toronto is the financial and technological hub of the world! It is the best city in the world to live in!!!!!

#29 Mike on 08.30.17 at 6:29 pm

Garth,

Please: individual doctors, lawyers and IT dudes are NOT small business. They have ZERO employees, except spouses and kids to dodge taxes. They just use small business umbrella to cheat on taxes.

They create ZERO jobs until they form a real small business which is a firm with multiple people employed(except diaper changing spouse and video game playing son in the basement) – which is not most of them.

Very good read, which every voter should read before voting. How many ways tax system can be exploited by so called small businesses, which they are not.

http://www.mondaq.com/canada/x/558208/Shareholders/Use+And+Abuse+Of+Professional+Corporations

#30 Kelowna on 08.30.17 at 6:29 pm

Great post Garth and I really like the fact-based approach to explaining why the majority of Canadians don’t feel weathy. At the simplest level, they have invested all their savings and a large part of their future earnings into the one asset strategy – talk about risk!!
Now, if they chose instead to rent, just imagine the increase in cash flow that they would free up to invest, spend on their families or simply use to enjoy life!

#31 unbalanced on 08.30.17 at 6:31 pm

Lee and MF. So right you are

#32 Penny Henny on 08.30.17 at 6:32 pm

Has housing made some people rich with windfall gains? Of course. In a limited time, and in isolated markets. But unless those properties are sold, at the correct moment, releasing the gains, the wealth is trapped – providing no dividends

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

I would argue that by providing you with a place to live is a Yuge dividend. Add that to the 3% increase in prices per year and that would just about equal the return gained in the markets.

#33 Howard on 08.30.17 at 6:39 pm

There are two groups of people who have been particularly defecated on in the recent past:
1) Savers
2) Single people

If PM excrement-for-brains (yes, slightly thematic my post today…) can find a way to tip the scales slightly less out of their favour, I may yet vote Liberal. Rising interest rates help the first group, now how about slowing the rampant theft of the “go forward and multiply” brigade from those who derive purpose from things besides not using birth control?

#34 TheSpangler on 08.30.17 at 6:40 pm

Since they are trying to address “fairness” shouldn’t the Lifetime Capital Gains Exemption (LCGE) be changed to have no limit from the current $800,000 amount to be similar to that of the principle residence exemption. Or should put a cap on the principal residence exemption to a $800,000 limit? Ya know make things equal.

#35 Howard on 08.30.17 at 6:43 pm

Sorry, the second aggrieved group should be “single and childless”.

But in fact, married childless people have immense tax advantages at their disposal compared to the single and child free.

#36 AGuyInVancouver on 08.30.17 at 6:46 pm

#6 Ian on 08.30.17 at 5:43 pm
Canada will exactly follow the US path in that graph. April will mark the high water mark for debt to income, and down it goes. Should be multi-year just like the US. Can’t happen soon enough.

Our governments need to do the same to get our ridiculous 436% debt to GDP ratio back into the land of the living.
_ _ _
First sort of black swan event needs to occur. The Great Recession in the USA was brought on by a number of factors, not limited to: poor financial regulation, a run on the shadow banking system maybe even the balance of trade deficit. So what will tip Canada into that kind of crisis? The markets seem to have shrugged of Home Capital’s woes. Maybe if there was a revelation about massive amounts of liar loans or inappropriate lending, but we haven’t see that yet. So what would tip Canada into a USA circa 2007 scenario?

#37 VanDammeCouver on 08.30.17 at 6:47 pm

The government will keep these real estate gasbag bloated as long as possible, as evidenced by the Warren Buffet / Home Capital bailout. They don’t want the bubble to burst because they know how bad it will be. Until they pop it, it’s not going to happen.

Warren Buffet is working for the government? — Garth

#38 yorkville renter on 08.30.17 at 6:48 pm

Debt levels are so high not only because people believe houses will go up forever (so far they have been correct), but also because in order to purchase at today’s prices most people have to take on debt.

This I how I know you are young and lack experience… you think “forever” means 15 years. cute.

#39 Johnny d on 08.30.17 at 6:48 pm

#11 cynical millenial

Does Garth have any policy ideas to stop the widening divide between the 1% and the rest? I’d love to hear them.

—————————————–

Garth has done a few posts on the importance of teaching financial literacy. It starts there.

Instead of teaching kids about the 263 different gender identities, teach them about the most useful tool man has ever created; money.

#40 Dave on 08.30.17 at 6:52 pm

Of course the wealthy have a much higher portion in financial assets. If the avg home price is half a million and someone has several million in assets they will have a much higher portion of their wealth in financial assets than someone who can barely make payments and owns a half a million dollar home. Anyone who bought real estate in Vancouver in the last 15 years, probably with the exception of the last two years, has made far more money than the average investor.

Only if they sell. — Garth

#41 Hans on 08.30.17 at 6:53 pm

Garth, I think it should be mentioned that debt is really the only way for someone in a lower wealth bracket to take a step up (or down if it doesn’t go as planned). As you have mentioned in the past, where else can you get 20 to 1 leverage? With the housing bull over the last 15 or so years, every Tom, Dick, and Sally has made money in housing and there are very few exceptions. This makes for a lot of great “I made money, you can too.” conversations at family bbq’s, company picnics, etc. Yes, it appears that this gravy train has ended, but I think it’s popularity had a lot to do with the ability to leverage what few assets people had to take a shot at making a wad of cash. Other than gambling with penny stocks or waiting for the next stock market fad to appear, where else can you leverage up the way that real estate has allowed the average Joe?

#42 Willy H on 08.30.17 at 6:54 pm

#22 FOUR FINGERS WATSON on 08.30.17 at 6:12 pm

Canada used to be a great country but Turdo #1 killed it. Turdo #2 is picking the corpse clean.

___ ___ ___ ___ ___ ___

Didn’t Harper and his band of Reformi-Con’s run serial deficits financed on irresponsible tax cuts to pay for billions in universal child tax credits to buy votes? A page torn right out of Mike Harris’s Ontario playbook!

Built lot’s of first class community hockey arenas (for the upper middle class kids to play in) and gazebo’s!

Harper’s band of misfits managed to increase our national debt by $120 billion in economic boom times.

A stunning legacy.

#43 Ace Goodheart on 08.30.17 at 6:55 pm

In any capitalist society, the people who own the share units of the given corporation (but do not claim ownership of, or responsibility for, the entire corporation as a whole) get the best tax treatment.

The people who run the corporation (CEOs, high level management, etc) get the second best tax treatment.

The people who work at the corporation and actually produce the products, get the worst tax treatment. These people often pay double or more the percentage value of taxes that are paid by the first group (shareholders).

Life is full of little distractions, set up by our wonderful governments, banks and the people in the second group, to prevent everyone from ever making it to the first group.

Being one of the people who did manage to get to the first group, and having grown up below the third, I can tell you that life in this group is very, very good. We live longer, we claim to be much happier than members of the other two groups, and we spend our lives smiling and enjoying our days while other people work for our incomes.

And we are taxed the least. Go figure. The governments of Capitalist countries, actually encourage people not to work, by taxing those who choose to become members of the first group, less than everyone else.

#44 Harold on 08.30.17 at 6:58 pm

Docs are basically government employees guaranteed an awesome lifetime income and also allowed to incorporate themselves so as to retain income in their corporations at low tax rates and then sprinkle it to their family members whether they work in the corporation or not. They squeezed the max out of this awesome deal and now small business people who are not guaranteed a lifetime income will have to suffer.

#45 Willy H on 08.30.17 at 6:59 pm

One of the reasons the middle class balk a financial assets is a result of their experience with large institutional mutual funds over the past two decades.

Extortionate management fees hidden from view skimming off several % points of annual growth leaving them with an investment barely keeping up with real inflation.

Is it any surprise they jumped on the real estate like fat kid on a Smartie?

#46 Damifino on 08.30.17 at 7:01 pm

I have done those things this blog ‘implores’ us to do.

It has worked fabulously.

#47 rental property math on 08.30.17 at 7:02 pm

Justin Trudeau ✔ @JustinTrudeau
To those fleeing persecution, terror & war, Canadians will welcome you, regardless of your faith. Diversity is our strength #WelcomeToCanada
4:20 PM – Jan 28, 2017

————————————-
So who do you think is going to pay for these refugees?
Sorry Doctors, IT guys and Plumbers.

#48 CANADA on 08.30.17 at 7:02 pm

#23 Dr. Eisen on 08.30.17 at 6:29 pm
I’m troubled by the way you speak about Canadians that way, Garth.

97.9% of land in Canada is inhabitable, and further development is restricted in the Greenbelt, so house prices only have one way to go -UP!

owning a home in Toronto or Vancouver is the Canadian patriot way for our country.

Marrying an independent career-oriented spouse and driving a $95,000 2017 model of Mercedes or Porsche SUVs IS THE CANADIAN DREAM that 350,000 immigrants strive for in our great country.

If you were my patient, I would sign a Form One so that I can have you evaluated under the Ontario mental health Act.

No one should badmouth Canada, because we are the greatest country in the world.

Toronto is ranked #1 by The Economist as the best city in the world to live in.

Demand is greater than supply in Toronto…our great city of Toronto is the financial and technological hub of the world! It is the best city in the world to live in!!!!!

PRICELESS……..LOL

#49 Greg on 08.30.17 at 7:04 pm

The rich have a house, usually paid for, and then they have extra money that they need to put somewhere. Naturally they invest in financial assets. Just makes sense as the alternative would be to buy a house and rent it out. Too messy for the rich. Us average smucks see owning a house as killing two birds with one stone. We have a place to live that we control and it’s increasing our net worth. I take pride in my home. It’s enjoyable. I wouldn’t invest my time and effort in a rented house. Yes we should invest too but I must admit I have trouble finding the cash. Saving is such a slooow process at my income level. I just wanted to point out that I really enjoy my home and I would hate to be renting.

#50 Dave on 08.30.17 at 7:05 pm

RE Four Finger Watson,
Trudeau got in power because Harpo screwed things up so bad that people voted him out. Under his watch a real estate bubble of epic proportions was created, he racked up the biggest deficit of any PM in the history of Canada, he failed to diversify the economy, leaving us hostage to oil prices, gutted environmental laws, muzzled scientists. Harper has done more damage to this country than Trudeau could do during his tenure.

#51 Suede on 08.30.17 at 7:08 pm

Why does Trudeau keep raising taxes on everyone.

I thought the budget would balance itself?

#52 What's The Point? on 08.30.17 at 7:11 pm

#29 Mike

Interesting, but what is your point? If we are really concerned about people setting up multiple companies and transferring money around to qualify for the SB allowance, thats one thing. But most legitimate business owners like myself (been in business 5 years, have more than 100 clients, work 8-12 hours a day six days a week). My company isnt a tax shelter, its part of my and my family’s Life.

Most business owners, me included, are not doing this. We are simply retaining some earnings for future capital purchases or rainy days when receipts are less than expenses.

I am not a whiner, and I dont see that any amount of complaining is going to stop these new tax rules from going through. For me it’s simple. As soon as the new tax rules come in I will lay off my 3 staff (2 full time, 1 part time, and focus on higher paying work that I can do myself, and will bring in about 50% less than I currently generate. I wont be motivated to earn $1 and give almost half of it to the government. I would rather stay in the lower tax brackets.

I will have to work about 5 years longer than I planned, but when it’s part-time, I can live with that (I would have probably gotten bored anyway). I will be sad about letting my staff go, but the incentive to build my business, risk capital etc will be gone, so why risk anything?

People who think these new tax rules are a good idea hate the fact that ‘rich’ people are avoiding paying tax. The truth is (and people dont want to hear this because it doesnt fit with their pitchfork raising ‘down with the 1%’ rhetoric, but the tax ALWAYS GETS PAID.

Example. I save $10,000 in my company this year and invest that money (first I have to pay 13% tax, so I am actually only investing $8,700. Any money I make gets taxed as passive income (very high), but whatever – lets focus on the $8700. Lets say after a year its $9050 (4% increase after tax would actually have to yield 7% gross, but lets fantasize for now). If I then take the $9050 out, I have to pay tax on the amount I took. At the same rates as everyone else. There is no free ride or discount here. Eventually, the tax gets paid. All I am able to do at the moment is let the money grow having only paid 13%’ish tax.

In any case, I say to the government – go ahead, change the rules. I will pay the tax due without whining. I will vote Conservative next time around. Maybe the employees I let go will to.

People keep saying about how business people are rich losers that just profit from others. Try taking responsibility, month after month for the salary of other people and see how it feels. See how paying your staff first, even if it means you get nothing, feels. Then tell me about how we are all lazy rich people that knew what they were getting into.

Or maybe I will just get a job. EI, CPP, Company pension, and if I get tired I will just go off on stress leave.

And for the record, the guy who wrote yesterday that he is paying more than 200k in personal tax – good for him. I didnt pay any personal tax the year before last because my income was less than 30k. My employees all earned more than me and I made sure they were paid before I was.

#53 Trojan House on 08.30.17 at 7:12 pm

Taxes are meant to divide people and, therefore, create class warfare. For people who like to play it “safe” they get a job that pays them every two weeks, has benefits and possibly they can contribute to a company sponsored pension. A government job is the “safest” you can get. However, employees pay the most tax. So it’s no wonder when someone has a good, safe job they don’t like to see tax breaks given to businesses, small business owners, independent salespeople or contractors and professionals such as doctors.

On the other side of the proverbial coin, tax breaks, incentives and so-called loopholes are given to people who invest money, start businesses or are the aforementioned professionals. Unfortunately, it is usually the wealthier people who can invest and start businesses, etc. They are given breaks, loopholes, incentives because of the fact that they “take risk” when doing these things.

Therefore, in essence, the government is rewarding risk and punishing people who play it safe. Hence we end up with class warfare because people who earn less but pay more are angry at the people who earn more but pay a lot less.

You will never solve the “problem” of income inequality because, let’s be real, everyone has a different earning potential – unless you go to a truly communist system where everyone gets paid the same no matter if you are a janitor or a doctor.

However, in my opinion, and as evidenced by the comment section on this blog, where half the people think the Trudeau government is stealing from them by changing the rules and the other half think Trudeau is not stealing enough, then the only way is to scrap the progressive tax system, tax incentives, tax breaks and loopholes and make everyone pay the same amount of taxes on everything no matter what. If this happens, the less fortunate will still pay their share of taxes, and likely only employment tax, whereas the more fortunate or wealthier will pay a lot more tax on the money that they invest, earn, risk, etc. Or in other words, their “fair share.”

Until then, the country, indeed the West (and the comment section of this blog), will be mired in sides divided between the tax me, I have no choice, and the tax me not, don’t take away my options to pay less.

#54 Leo Trollstoy on 08.30.17 at 7:15 pm

Garth is making risk-taking wage slaves angry again…

#55 Jewdacris on 08.30.17 at 7:22 pm

All this rich vs poor crap is a bunch of fart dust.

The real talk / debate should be the discipline vs undisciplined

Regardless the money one makes or doesn’t make the hardest part to building wealth is saving.

Rich and poor nobody in this country seems to have any skills when comes to saving.

People need to live below their means and save save save.

I have millions saved and still think twice about spending and buying new cars. Then I have friends who were unemployed for 1 year, finally land a job payin 50k and first thing they do ? Go lease a new car haha. It’s insane.

These problems we face as a nation are much deeper than how deep Justin wants to probe us.

Regardless of what side of fence one stands we should all unite and be against any bs tax increases government wants to introduce.

I would how the government would feel if overnight all us Canadians decieded to pay 20% less tax. It’s basically what they expect from us so what’s good for the goose good for the gander ?

People are going to find out the hard way pain is coming. And I will say it again. “Careful what you wish for”. Today they tax the rich tomorrow they take the people in the ditch.

Nothing good will come from increased taxes. We as a nation must stand up and refuse any type of increases.

#56 Damifino on 08.30.17 at 7:22 pm

#44 Harold

Docs are basically government employees guaranteed an awesome lifetime income and also allowed to incorporate themselves so as to retain income in their corporations at low tax rates and then sprinkle it to their family members
————————————–

Complete nonsense!

I walked into my doctor’s office several years back with a thrombosed haemorrhoid. It was in pure agony. If you’ve had one, you’ll know what I mean. If you haven’t, then pray you never will. On a pain scale of 1 to 10, it’s a 12.

Then and there, in 5 minutes, he froze me, cut it out and returned me to the land of the living. Would you do a job like that? Didn’t think so. You’d let me writhe on the flour and say “it’s your problem, pal”. I know you would.

Don’t become the same part of the anatomy that caused me so much distress by slagging off hard working and dedicated GP’s who face a world of human crap and corruption each and every day.

That attitude is enough to make anyone sick.

#57 Jay on 08.30.17 at 7:23 pm

# 5 MF
Hi MF, to answer your question, I am shareholder in 2 businesses. We employ over 30 people.
No one “gifted” me anything.
I rent and have rented for years because it is cheaper by far than owning and real estate valuations in Ontario are insane.
I have diligently invested my excess cash into income producing assets which I then reinvest the income.
In a slow and steady manner from my early 20s to 40s (now) I have accumulated a portfolio that kicks out a little over 3,000 per month in dividends/distributions. Hint: that can cover a mortgage payment.
You may be dismayed and or shocked but it doesn’t happen instantly.
Cut your expenses, create excess cash and invest. It is something EVERYONE can do. Garth has been kind enough to show you how. Maybe you should just try it.
Grow up, stop whining and take accountability for your financial situation.

#58 Bezengy on 08.30.17 at 7:25 pm

Canadians don’t like big business. We don’t like the banks and we don’t like our oil companies. We don’t like the our drug companies and we don’t like rich people. Why?, well maybe it’s because our politicians tell us our big companies are ripping us off, or maybe it’s because Kevin O’Leary has personified the rich Canadian business man who couldn’t care less if the masses are starving on the street, but I believe either we start embracing our industries who pay the bills, which means let them make money, or we accept a lower standard of living in this country, the choice is ours.

#59 FOUR FINGERS WATSON on 08.30.17 at 7:26 pm

#50 Dave on 08.30.17 at 7:05 pm
RE Four Finger Watson,
Trudeau got in power because Harpo screwed things up so bad that people voted him out. Under his watch a real estate bubble of epic proportions was created, he racked up the biggest deficit of any PM in the history of Canada, he failed to diversify the economy, leaving us hostage to oil prices, gutted environmental laws, muzzled scientists. Harper has done more damage to this country than Trudeau could do during his tenure.
…………………………
I’m not a Harper fan but u forgot that he had to deal with the GFC. On the other hand, Turdo #1 left us with a humungous national debt and a country that can’t even get a pipeline built to tidewater to export its oil. Natural resources is how we pay for our schools and hospitals and airports and highways and all the rest of our social programs. Should we just borrow umpteen billions of dollars every year and raise taxes to pay for all this and let the budget balance itself ? You lack of comprehension is impressive dude.

#60 Jungle on 08.30.17 at 7:29 pm

There is no middle class anymore, those who try to achieve some financial success must use leverage and buy a house. 1%er have MUCH more cash flow, and more options to invest. (high net worth)

It seems to be lost on most people here that the bulk of 1%ers didn’t start that way. Just like you. — Garth

#61 Blacksheep on 08.30.17 at 7:31 pm

TROJAN # 53,

So what do suggest business owners pay this, flat rate tax on?

Dividends? Management income? Wages?

#62 Prairieboy43 on 08.30.17 at 7:33 pm

Ooh! Ooh! Ooh!, we need more Tax Eh! Mike and Dave show. Two brothers love to talk about Taxing Canada business eh! “T2 and BillM” (The Tax Nazi’s), love Mike/Dave. Now we know what happened to Superdave with all the head injuries. Presented daily at greater fool.
PB43

#63 cynical millenial on 08.30.17 at 7:34 pm

“Sure. Do what his blog implores you to do, and has shown you how. — Garth”

Do you honestly believe people making $15-$30/hr achieving 4% better returns is going to address a trend in growing wealth equality that has persisted for decades? The divide has been growing through good housing markets and bad.

Garth, I’ve been a fan for years, but this seems like a major blindspot for you due to the high-end individuals you interact with.

The next generation (broke millenials) don’t believe the conservative narrative that more super rich people is a good thing. Or that business owners deserve such a big share of the pie compared to the workers who make things happen. We learned our lesson from the GFC.

So stay whiny and irrelevant. Go complain on a blog. That should help. — Garth

#64 Smoking Man on 08.30.17 at 7:38 pm

Was watching TV news today. Try to avoid it at all costs. So they have freshmen week on the campus at Mcmaster. The duds start to talk. But they don’t sound like duds. Girly men at best. Now that’s this crop.

What do you think the boys starting grade 4 getting gender studies early will be like when it’s their turn for freshmen week. Or is freshmen now a tabo pronum.

Canada is doomed. Home school and save the country.

#65 Taxpayer on 08.30.17 at 7:38 pm

Heard the prez next door ‘wow, what a great crowd’ is talking dropping the corporate tax rate to 15%…I wonder if that will happen after the wall is built and Obamacare is replaced…for all you businesses threatening to pull up stakes because ‘everything is better in the states’, ..here is a line from the gov’t of Canada website regarding corporate tax rates…Federal rates
The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax abatement.

After the general tax reduction, the net tax rate is 15%.

For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 10.5%.
Hmmm, 40% vs 10.5 %…..no wonder your business sucks.

#66 Indefensible on 08.30.17 at 7:39 pm

#1 Dave D on 08.30.17 at 5:15 pm
“Looks like we will be stuck with that idiot Trudeau in power for the rest of his natural life. Not enough ‘small business owners’ getting screwed by his new taxes to vote him out.”
______

Once everyone who thought this was an attack on the wealthy realizes this actually taxes THEM, we will see how many votes he loses.

I am picturing a bunch of clowns pointing and laughing at the other clowns, not realizing they are themselves a clown.

The other thing Trudeau needs to do is put this tax money into something that actually strengthens the middle class.

Step 1: take money from the rich (but not the mega-rich, they’re our biggest donors. Just the Doctors and IT Guys will do). CHECK

Step 2: Fund overseas human rights advocates. CHECK

Step 3: Raise taxes on middle class Canadians because we can’t find the money we raised in Step 1. Stupid budget was supposed to balance itself…

#67 Asterix1 on 08.30.17 at 7:39 pm

#20 Joe2.0 on 08.30.17 at 6:11 pm
Who would want to live in Toronto?
Really.
Vancouvers full of ex Torontonians who would never go back, hot muggy, cold windy, polluted lakes..
Who cares if it’s the centre of the universe.
It’s different in Vancouver and the market proves it.
As do the surrounding burbs.
—————————————–

Who would want to live there? How about 9,400,000 in the Greater Horeshoe area. It’s 26% of the population of Canada.

Market in Vancouver “proves it”, “its different in Vancouver”. Ha, ha, not sure if you are being funny or serious. Enjoy the normalization of RE in BC in the coming months/years!

Ps: Great post Garth. Should be mandatory reading starting in Grade 6.

#68 cynical millenial on 08.30.17 at 7:43 pm

“Warren Buffet is working for the government? — Garth”

It appears so! Must be one of those P3’s I keep hearing about.

https://twitter.com/JohnToryWatch/status/888813380777234432

#69 Capt. Serious on 08.30.17 at 7:46 pm

Only 19% of Canadians have stock market exposure.
!
!!!
Holy mac, are people idiots?
And of that 19% percent, I’m sure many do not have a globally diversified portfolio, preferring home country bias.
If one doesn’t want to slice and dice too much, one can get the whole world with two ETFs: VCN (Canada) and VXC (the rest of the globe).
Sad!

#70 cynical millenial on 08.30.17 at 7:47 pm

“So stay whiny and irrelevant. Go complain on a blog. That should help. — Garth”

Not your usual motivation candor.

You were discussing political policy measures. I asked if you had any government policy measures that a conservative could support that would address rising inequality. I guess either they don’t exist, or you don’t think increased wealth inequality is a bad thing.

My career and my portfolio are doing just fine. I just worry for the people who aren’t as lucky as I, as those are who I grew up with.

#71 Trojan House on 08.30.17 at 7:48 pm

#61 Blacksheep

As mentioned – everything you listed and more. For example, capital gains. No more paying on 50% of the gain. 20% on 100% of the gain. Maybe everyone’s wages are taxed at 20%. Income tax – 20%. Dividends – 20%. Management income – 20%. HST/GST – 20%. Rental income – 20%. Perhaps corporate taxes could be a bit higher at 25%.

Imagine how much the tax code would be simplified. Accountants and tax preppers wouldn’t be happy because everyone could calculate their taxes very easily. You could probably cut about half the staff at the CRA.

#72 For those about to flop... on 08.30.17 at 7:48 pm

Here is the latest effort from Garth’s neighbours down the hall at howmuch…

M43BC

“The Real Minimum Wage Keeps Getting Smaller. Here’s Why

It seems like the U.S. federal minimum wage is always in the news. Activists on the left believe Congress should raise it to $15 an hour, but opponents argue that doing so will eliminate too many entry-level jobs. What gets lost in the debate is a basic understanding of how often Congress has raised the minimum wage in the past, and how the current rate of $7.25 stacks up against previous levels. We created a visualization to find out.”

https://howmuch.net/articles/minimum-wage-keeps-getting-smaller

#73 Costco Nation on 08.30.17 at 7:51 pm

For the ones not corrupt at the root, I think I have a solution. It would clean the lice out of this country which I still love. Despite the illness. Here it is. Depart. Not forever. For a while. Starve the beast. Leavel the public “servants” and the DB-ers behind, fend for themselves. It would be fun also to see the parasite cannibalize. Come back when it’s over. Draw everything, chequing, rsp, TFSA. Burn the crop. Poison the well. Then come back in 5-10 years to bury the carcass. And restart. Small government, if any. taxation IS THEFT. Read history. Be brave. We shall prevail.

#74 Ian on 08.30.17 at 8:03 pm

Much like the free financial gift of shorting Home Capital at 31 in April before the Ontario rules, you now have another free gift on offer at 13 before the OSFI rules. Don’t miss it or you’ll have to face my ridicule on here for a while, and you don’t want that lol. It’s either that or Mark keeps talking about deflation. Pick your poison dogs.

#75 n1tro on 08.30.17 at 8:06 pm

@Penny Henny

Many of the poster’s here have a problem with income sprinkling where there is no actual work at the said company to merit this pay.

Be is legal or not as it stands now does not matter. It is not right.
—————————————
And who determines what “work” is done in a business? The owner? Some auditor? God?

Get off your soapbox. The topic is the broad legislation that clearly isn’t about fairness no matter how much the SJW in you screams out.

#76 Chaddywack on 08.30.17 at 8:11 pm

The reality is there are more pro-Trudeau hipsters than business owners and the Liberals are insanely popular as recent polls show.

https://en.wikipedia.org/wiki/Opinion_polling_in_the_43rd_Canadian_federal_election

Their lead has only been increasing. More and more I think that he should be called Teflon Trudeau as nothing sticks to him.

Doubled deficit predictions, $10.5 Million Kadhar payout, Constant Vacations, Aga Khan, and this haven’t done anything to his numbers.

Free weed, good looks, and promising things to every special interest group possible has resulted in this perpetual popularity.

#77 ImGonnaBeSick on 08.30.17 at 8:16 pm

A limited history lesson; Nazi stands for National Socialist (Nationalsozialistische). Hitler was the leader of the National Socialist German Workers’ Party. Hitler was quoted as saying, “we are socialists, we are enemies of today’s capitalistic economic system”. https://en.m.wikipedia.org/wiki/Economy_of_Nazi_Germany

As well as, “The one and only problem of the age, he told Wagener, was to liberate labour and replace the rule of capital over labour with the rule of labour over capital”… http://www.independent.co.uk/arts-entertainment/hitler-and-the-socialist-dream-1186455.html

#78 NoName on 08.30.17 at 8:17 pm

#57 Jay on 08.30.17 at 7:23 pm

how old are you?

#79 ImGonnaBeSick on 08.30.17 at 8:20 pm

#50 – the people don’t vote new governments in, they vote old governments out. Hopefully this one is short lived.

#80 will on 08.30.17 at 8:22 pm

It’s cheap and easy to buy stocks nowadays, I pay 9.99 per trade online. But was it always this easy? Was it always this cheap? I think not. In the old days when there was an actual trading floor I think it was more complicated and not that cheap to buy a board lot of shares. Anyone have any perspective on this? How much would it have cost to buy 100 shares of Bell through a broker in say 1970?

#81 alsak on 08.30.17 at 8:22 pm

#19 way to go great way to look at it

#82 Newcomer on 08.30.17 at 8:35 pm

#23 Grey Dog on 08.30.17 at 6:17 pm

SAVE SAVE SAVE while you are young, brown bag it, eat 99% of your meals home cooked. INVEST INVEST INVEST…thanks to compounding when you hit age 65 1M$ will be EARNED by you.

———————

That works out well if you like that kind of thing in the first place, but having a million bucks when you are 65 is hardly good compensation for a lifetime of brown bag lunches. Give the kids some choice: spend less than you earn, or earn more than you spend.

#83 Doghouse Dweller on 08.30.17 at 8:38 pm

What ever happened to the lower class and the working class ?
Has very debt slave snowflake in in the country been upgraded to the liberal middle class ?
Formerly, the Entrepreneurs , Doctors, Lawyers, etc.,were middle class and then there were the upper class and the corporate welfare rich like the Bombardier crew endlessly feeding at the Trudeau tax`em trough. The more things change, the more they stay the same, N`est-ce pas?

#84 Harold on 08.30.17 at 8:42 pm

Excellent Article that tells us the truth about Doctors use of income sprinkling; http://www.macleans.ca/opinion/what-do-doctors-really-have-to-fear-from-the-feds-tax-crackdown/?utm_source=macleans&utm_medium=organic&utm_campaign=recirc&utm_content=tag_list

#85 MF on 08.30.17 at 8:45 pm

Jay,

Thanks for the post and congrats on your success.

I was with you until the last sentence though.

Gotta ask, what makes you think I don’t save and work as hard as I can? Or value the success of others? Some stereotype you read about or heard your buddies say?

I rent. I also basically work 7 days a week and have done so for years. We are pretty much the same except you have your own business (which I commend you on).

Don’t be so quick to judge and thanks again for the response.

MF

#86 Blacksheep on 08.30.17 at 8:46 pm

Trojan # 71,

“Maybe everyone’s wages are taxed at 20%. Income tax – 20%. Dividends – 20%. Management income – 20%. HST/GST – 20%. Rental income – 20%. Perhaps corporate taxes could be a bit higher at 25%.”
————————————
Corporate taxes at the suggested rate of 25%? Must be for publicly traded corps only, correct?

Even then I thought you were promoting “fair share,” why ding any one harder, than anyone else?

#87 Missing something? on 08.30.17 at 8:47 pm

I apologize for my ignorance, but I don’t see how these new taxes on passive income from corporations are a problem.
Corporations can change their types of business, so after a doc retires, ze can just plop all zer money into a, say, rental apartment business with a high-percentage downpayment, hire a property management company and live off fat rental income left after the mortgage, taxes, maintenance and mgmt fees are paid. The business is considered “active” and can be so until it’s time to check out.
Or, turn your company into a holdco, invest in a balanced portfolio with lots of dividend income, rebalance once a quarter and live off dividends, while being considered an ongoing business.

Am I missing something?

#88 n1tro on 08.30.17 at 8:47 pm

#70 cynical millenial on 08.30.17 at 7:47 pm

My career and my portfolio are doing just fine. I just worry for the people who aren’t as lucky as I, as those are who I grew up with.
——————————-
Someone call the pope! We have an unheralded saint among us. If you are so worried about your generation, write a cheque to the government and make it out to “Receiver General”. Your money will go into a big account where your generation’s hero JT will surely put it to good use making things fair for all.

#89 MSM-Free Zone on 08.30.17 at 8:48 pm

“…..government to punishingly increase taxes on the successful (people making over $225,000 a year)…..”
____________________________________________

So, by extension of the logic here today, those who will never pull in six figures x2 are unsuccessful?

I feel like such a turd. How will I ever face my kids and dog ever again?

#90 Dale Weise on 08.30.17 at 8:49 pm

Re: 19% exposure to market

If everyone piled into equities, wouldn’t shares be really overvalued? i.e. Netflix

Kinda need these amateurs making pennies on GICs.

#91 perspective on 08.30.17 at 8:49 pm

We have the taxing triplets. The NDP, Liberals and Conservatives. Everyone seems to want some government money, free daycare, free heath care, transfer payments or whatever. Well, the money has got to come from somewhere. The Port Man bridge in BC will soon be “free of tolls”, but someone will still need to be paid. Truth be told, we don’t have tax problem, we have a spending problem. Now that the Alberta oil bonanza is over we have a government that is desperate for cash. Look for more “Tax Fairness” going forward.

#92 Poor cousin of U.S = Canada on 08.30.17 at 8:49 pm

There are no rich people in Canada. Well may be a handful…

#93 What Would Keynes Think on 08.30.17 at 8:50 pm

Keynes would be amazed to see that the propensity to consume has gone to unity. But he would also observe that a growing inequality of wealth in the aggregate nevertheless lowers the propensity to consume. That has always been the case. But now it is only the top 5% that does all the saving. In his two phase analysis, he would conclude that the bulk of these savings are not spent on products in our own economy. It is not that these are all very liquid investment savings – no, much of it returns to industries, but unfortunately the bulk of it does not end back in Canadian consumer hands. So, according to Keynes we have a vicious circle. That is what is unfolding rapidly now, now that the masquerading of the real issues via the deliberate (yes!) housing bubble creation has run its course. The neo-keynesian remedy would appear to be what the Trudeau govt is doing, but that is wrong: indeed, much of what is called the great keynesian stimulus period from 1947 to 1975 would not find much approval from Keynes at all, as is well-documented. It resulted in stagflation for over a decade. But monetarism a la Friedman does not work either, and the combination of the two, as has become clear since 2009, is no good either, other than for kicking the can down the road. So, what is the solution, short of leaving Canada? Could it be a return to Reaganomics, with a neo sauce? Personally, I don’t think our society can handle the shock that would result from this therapy, we are too much overloaded with debt. What to do, then? What are all those economists good for when they cannot get us out of this predicament? Personally, I think we should devalue our CAD and through tax incentives encourage the animal entrepreneurial spirits, including attracting the best and brightest from all over the world. Not to buy overpriced houses, but to help make our economy competitive again. But I am thinking of very different tax benefits than the pathetic ones that Morneau is planning to take away. Frankly, those do little to making us competitive again.

#94 Tbone on 08.30.17 at 8:53 pm

#80
In the 80’s I think it was either 1% or 2% of the dollar value of the stock
You wanted to buy over at bmo. You had to go through a broker as no online mechanism existed that l know of at the time . Same cost if you wanted to sell. Then TD later on charged 29.95 per trade and now it’s 9.99 over there. Now brokers are as valuable as travel agents .
Most people with any desire can do either by themselves.
I still have an account with bmo and haven’t sent any new money there in over 20 years , but my initial money has tripled In mutual funds.
They still want to charge me a management fee to hold a rsp account
Over there but I call up and make them reverse the charge.
That will end soon, lol.Moving my rsp account to TD and buying mawer balanced in self directed account that l have there.

#95 Harold on 08.30.17 at 8:53 pm

#56 – Damifino
That’s the blackmail we taxpayers face when Docs don’t get their salary hikes and now corporation tax shelters; We will be left writhing on the floor when we turn up at emergency rooms or Docs offices!
Who else uses words like thrombosed haemorrhoid ?

#96 the Jaguar on 08.30.17 at 8:58 pm

It’s the ‘Blame Game’ at work here. Not sure I would agree we (canadians) are any worse than americans in this regard, but it does seem that many try to build themselves up by pulling others down. There have always been people who had more money, were more advantaged, if not by wealth, location, connections, greater intelligence hence greater opportunities, better looking, etc. It’s a long list. Nobody ever said life was fair. It used to inspire others to use whatever talent they might possess to work harder to find their own place in the sun. If you had no talents you just worked harder. Sometimes the less you have the easier it is to qualify for assistance with student loans, subsidized housing, income assistance of various types. Society offering a helping hand to the path of success and financially better days.
Instead it seems like every other day there is a protest of some sort (especially Montreal) where chairs are kicked over, cars trashed, garbage bins set on fire, smoke bombs, etc. All in a sad little rage against those that have worked hard and accomplished much. Participants a bunch of losers dressed in black combat gear with their faces covered.
Just there to hang back with the brutes and watch themselves on television later. What a disgrace and what a bore. All of them bullies. Bullying others like members of the Pride Parade executive to not allow police officers to march in the parade in their proud uniforms. Resenting others who took risks and worked hard to build a company and happen to take advantage of perfectly legal measures called ‘tax avoidance’.
It’s the same bunch whinning about how it isn’t fair that the rich have money, or boomers had it too easy and ruined the world. Don’t like your life? Your circumstances? Your past choices? Step up and make changes. Garth is here everyday, busting his ass, free of charge, trying to help you find your way.
I for one am grateful.

#97 why’s there such a disparity of wealth on 08.30.17 at 9:01 pm

The same old house vs investment portfolio, that comes hand in hand with the same old entrepreneurs vs T4 peeps simplification that plays into the ages old class-warfare, anti-business hero/villain stereotype.

You are repeating the same mantra day after day, while entirely missing or ignoring the analysis of the bigger picture in which these simplified yin-and-yangs are taking place.

No wonder events like Brexit or Trump presidency are catching you by total surprise, as if they came out of blue, when unexpectedly, overnight for no reason whatsoever significant segment of the population completely lost their mind.

Will you ever acknowledge that in the not too distant past Canadians actually had a healthy mixture of home ownership and investment portfolio – without the need to pick one vs the other?

Will you ever ask and analyze why has this changed?

Do you ever wonder if there are any dots to connect between this and some of the “out of the blue” events?

Is really “home ownership lust” all the reason and cause, the beginning and the end for all the sickness and wickedness that is?

No, but it’s a good place to start. You can’t change the world. But you can change you. — Garth

#98 Hopeful on 08.30.17 at 9:06 pm

I am waiting for liberals to make taxes fair for salaried and small businesses. Salaried people are the one running this country. Small business owners instead of contributing to this country are filling their own pockets. In my circle, even taxi drivers who use all subsidized services and welfare have multiple expensive homes. I strongly believe liberals move is bold and have next victory.

#99 X on 08.30.17 at 9:06 pm

Keep in mind this is the same Liberal government that offers tax rebates on $100,000 plus Tesla cars….yet they are going on the tax the rich sales pitch to voters.

I read today in the Sun that the Dr tax will not bring in $500 million dollars. BNS just sponsored a rink for more than that. Kinda sounds petty to irritate a bunch of self employed voters when put like that.

Personally I would love if income splitting for all were an option. I mean if it is that great, shouldn’t the gov’t want to help make it better for Canadians. Why isn’t that the issue?

And if the Liberals are after tax fairness, then the proposed business tax changes should go along with fairness in personal tax changes. Same personal tax rate for all sounds fair.

Most people are either poor or wealthy for a reason. Education and money habits are enormous factors. You don’t have to be a Dr to accumulate wealth, nor are all Dr’s wealthy. Funny how when a Dr spends all of their money and lives paycheck to paycheck, nobody has any sympathy, as it is their own fault that they haven’t accumulated any wealth. But when it is the working class somebody has to be blamed. We still live in a country where the average Joe can retire in comfort, if you work hard, put your mind to it and stay fiscally disciplined. (or it is possible at least until the end of the 75 day ‘consultation’ process)

#100 ANON on 08.30.17 at 9:07 pm

They never were.

Humbly beg to differ. They were, just the same as the ones owning the debt instead of owing it are still. Which is why both parties lose when debt (wealth) deflates.

#101 common sense on 08.30.17 at 9:07 pm

Ok..when are they coming after TFSA and RRSP’s?

After all you must be rich to invest in them….

10 years out max…

#102 Mark on 08.30.17 at 9:07 pm

Canadians own crazy amounts of real estate. 70% of Canadians own their own homes.

But as Garth reminds us constantly, Canadians have an even greater love, and that is, to hold fixed income investments in Canada’s banks and financial institutions. Garth constantly reminds us that an absolutely disproportionate chunk of TFSA and RRSP accounts, for example, are held in fixed income investments. Fixed income bond investments that actually are the source of funding for the RE market (as for every dollar a bank lends on a mortgage, the bank must first borrow that dollar from its creditors!).

So it logically follows that if RE prices collapse, that the value of the other side of the balance sheet, the debt that is against RE, must collapse.

Thus, it will be not only the owners of RE that suffer in the market collapse, but also, and probably to a lesser extent, the *loaners* to the RE owners that will suffer.

The beneficiaries, of course, will be those who hold equity in the banks, and who own equity in out-of-favour countercyclical sectors. The Bank of Canada will be forced to run excessively low interest rate policy for the next decade (with interest rate cuts soon to come as the CAD$ shoots higher — did anyone see today’s PPI print??? Very clearly deflationary at -1.5%), which will drive higher realized spreads into the banks’ bottom lines. Out of favour and under-invested equities will benefit from the cyclical rotation. The precious metals should do well due to global trends and Canada’s utter dominance of the sector globally.

A decade from now, the Canadian financial landscape will look much, much different. The TSX will likely have tripled or quadrupled (if the 1990s are any model to go by), and the number of newly minted millionaires will be amazing. Engineers and geologists who spent the past 30 years muddling in the trenches at minimum pay trying to keep the mines running will be the new owners of the big mansions and Vancouver’s west side. Gone will be the leveraged RE speculators, the landlord families, the Realtors and bankers as top dogs in the economy. Wearing Prada and Gucci, driving the Bentleys will be the families who are either exposed to the precious metals industry through employment, or had the foresight to buy into the sector when it is cheap.

#103 What Would Keynes Think on 08.30.17 at 9:08 pm

I should add that in my viewpoint, the key is to get the top 5%, or make that the top 1% to be more effective, to become eager to invest their savings in entrepreneurial Canadian-controlled companies. Unfortunately, not only are the pickings slim, they have been dwindling because of the non-productive wealth effect of the housing bubble. But entrepreneurs move fast when opportunities and tax incentives kick in, and as mentioned we should also focus on attracting foreigners with skills that can benefit Canada. I recall Trudeau jr. making some reference to policies along these lines. But in practice nothing has happened so far. It is a multi-year track, so we should have started this already years ago…

#104 Ian on 08.30.17 at 9:13 pm

It’s funny, my education etc was an an engineer but I got super interested in financial markets.

I was always told the risk free instrument was US treasury bonds.

Today I will say the risk free instruments are shorting Home Capital and buying gold. Both of those have ZERO risk. Zero

US is such a house of cards it literally defies analysis

Gold has lost 30% of its entire value in the past six years. Zero risk? — Garth

#105 e trade baby on 08.30.17 at 9:14 pm

“Only 19% of Canadians have stock market exposure. But, of course, 70% of us own houses. For the Boomers it’s closer to 85%.”

Hmmm, could this be why?

https://www.youtube.com/watch?v=2G_RJKlLtrg

That spoof is a decade old. Since then US equity markets have doubled. — Garth

#106 hamilton on 08.30.17 at 9:18 pm

Hi Garth, Love the blog,

Got this e-mail today from a realtor, LOL

The federal government is considering implementing additional mortgage tightening rules that could have an important impact on uninsured mortgage applicants.

We believe all Canadians should have access to housing that meets their needs and that they can afford. However, the Office of the Superintendent of Financial Institutions (OSFI) is proposing a stress test for uninsured mortgages. The proposal would require lower-risk borrowers to be approved at two percent above the rate offered to them by their lender. This measure would shut many consumers out of the market, drive them into less suitable housing or entice them to visit sub-prime lenders that are not federally regulated. The reality is that homeownership is slipping out of reach for many first-time homebuyers in housing markets with a shortage of affordably priced homes.

These rules will also prevent many first-time investor from ever getting in to the market for their second property, let alone a third property.  Keeping investors out of the market removes supply of available rentals while raising demand by keeping would-be-buyers in the rental market, which in turn raises rental rates.  So an affordable housing strategy is completely lacking from this government.

As a voter you deserve your say and I have sent my own letter to my MP… take action and make your voice heard!  You can even copy and paste the above paragraphs to make it simple and easy, or just forward this email!

Find your Member of Parliament, by postal code, here:
https://lop.parl.ca/ParlInfo/Compilations/HouseOfCommons/MemberByPostalCode.aspx?Menu=HOC

Sincerely,

#107 Leo Trollstoy on 08.30.17 at 9:19 pm

It seems to be lost on most people here that the bulk of 1%ers didn’t start that way. Just like you. — Garth

So stay whiny and irrelevant. Go complain on a blog. That should help. — Garth

[ ] not rekt
[x] rekt
[x] really rekt
[x] tyrannosaurus rekt
[x] parks and rekt
[x] star trekt
[x] school of rekt
[x] catcher in the rekt
[x] great rektspectations
[x] rekt it ralph
[x] the shawshank rektemption
[x] forrekt gump
[x] finding rekt
[x] rektal exam
[x] shrekt
[x] rektium for a dream
[x] The Mummy Rekturns
[x] Pride and Prektudice
[x] erektile dysfunction
[x] rektroom
[x] continental brektfast
[x] Brektzit
[x] rektipe for success

#108 millmech on 08.30.17 at 9:23 pm

#49 Greg
This is why your poor, being a homeowner. I have owned in the past but would not do so again as renting is a much better option financially than owning would ever be for me personally.
Renting allows me to invest 60%-70% of my net pay rather than sinking it into a house and after over a decade of doing this I am able to be financially independent(make more money from my investments than I do as an employee now)
I would rather be FI than a homeowner beholden to my employer(BTDT), less stress, way more freedom to work as I please for who I want when I want.
As for the everyone complaining about wives drawing salaries from businesses for doing little work and how great business owners have it I call bullshit. A very good friend of mine just got out of the hospital after numerous critical health issues and six operations and is looking at a two year recovery. His wife who did all the payroll and accounting is now bidding all the jobs, dealing with all the subcontractors, making sure the apprentices are getting trained and putting out all the fires that he used to do and will not be able to do for at least two years. She is keeping forty guys employed while helping her husband recover and rehabilitate and they have no sick days, no disability, no EI or pensions to draw down, it is all in the company.
Better tax the crap out of these slackers and take away any incentive for them to make a better life for themselves and their employees.

#109 DON on 08.30.17 at 9:24 pm

http://ipolitics.ca/2017/08/30/anger-over-controversial-liberal-tax-proposals-to-be-focus-at-caucus-retreat/

If the source is credible…ouch!

#110 What Would Keynes Think on 08.30.17 at 9:28 pm

To #17, cynical millenial: as an entrepreneur who is in the top 0.1 percent, I do NOT think Garth’s advice to you is constructive. Your predicament is real. Given that you have meager savings, if any, the last thing you want to do now is to invest them in stocks and bonds, even if it is through ETFs. These markets are massively overpriced, it is even worse than our Canadian housing bubble. You might suffer a sudden drop of 10 percent or much more. A financial advisor eould argue that in the long run, by just holding your investments, you come out ahead. But, coming back to Keanes, in the long run we are all dead, as he said. Just stay highly liquid in risk-free investments with whatever savings you have, and focus all your energy on learning a skill or acquiring knowledge in a growth industry. Alternatively, if you are entrepreneurial and serious, you can knock on the door of people like me; we may invest in you not primarily for profit motive, but because we believe in passionate purpose-driven entrepreneurship. The one advice from Garth that I do fully subscribe to is: do not buy a house at your age, under any circumstance, it is the road to disaster. The only good time to buy a house is after a major market melt or if you have more than enough money so that you don’t care if the house drops in value.

#111 Dee on 08.30.17 at 9:28 pm

Warren Buffet is working for the government? — Garth

————————–

Actually G, he’s right. I dont have a link handy (which I know you like) Morneau was quoted and even said in a video interview that “it’s probably not a coincidence that warren came in on the hcg deal two weeks after the prime minister and I met with him”. They went down there to meet with him. That’s certain. I dont think that’s a conspiracy that he bought into hcg right after. Buffett alsosaid he didnt do much due dilligence (3 days) and didnt care to have anyone on the board of hcg. Govnt and buffett worked together to save home cap. Right after the big gave a loc to equitable group (because helping out a competitor is what businesses do. *sarcasm*. I think they fear contagion

#112 MF on 08.30.17 at 9:33 pm

#55 Jewdacris on 08.30.17 at 7:22 pm

Careful though. Our economy depends on people spending money. My job in sales as an example is heavily dependent on people saving less lol.

We don’t want everyone saving everything and cutting their spending too much.

The debt levels can be “mostly” blamed on some worthless and incompetent institutions like CMHC and BoC who distorted the value of money. Their policies have been straight up garbage.

MF

#113 Frank on 08.30.17 at 9:39 pm

Globally diversified portfolios, meaning portfolios or ETFs of companies in different industries doing business round the world – Great!

Portfolios or ETFs of globally traded companies, not so smart!

There is no track record to date for any emerging market to suggest long term investment.

Highest long term market returns, looking at all calander years is US, followed by major European markets, and Canada.

Look at long run market index returns, and question common assumptions !

Soon China will be the world’s biggest economy. Why would you not want a little exposure? — Garth

#114 The man with credit? on 08.30.17 at 9:41 pm

I had a problem with my bank card and had to go to the BMO counter for help. The woman told me that I was approved for a line of credit. I told her that I was not working (and they know this already) – she said it didn’t matter, I was approved.

I declined, and she kept saying, are you sure?

This can’t end well.

#115 Millennial Homeowner on 08.30.17 at 9:57 pm

Raising taxes on the middle class (where the majority of small business owners reside) in the name of tax fairness for the middle class – doesn’t get any more ironic than that.

For all those whining about the injustice of tax incentives for small business owners, may I ask what prevented you from taking advantage of this incredible opportunity? Was it lack of smarts or just laziness? Or perhaps… you were unwilling to take the risk of giving up your safe salary for the uncertainty of business ownership. Fair enough – I fit in this camp as well – but at least let’s not be afraid to compensate those brave folk that are willing to take the plunge.

The only beneficiaries of this new rule are government workers and trust fund babies. In other words, Trudeau and Morneau.

#116 45north on 08.30.17 at 9:58 pm

Garth you say there is a big difference between the financial assets held by the rich and the real estate assets held by everybody else. The financial assets held by the rich are more predictable, effective, efficient and predictable. This dichotomy is about to get a whole lot worse. The poster “Reality 1” makes the point that the proposed tax plan will further depress the value of real estate:

http://www.greaterfool.ca/2017/08/27/fantastically-irresponsible/#comment-537005

here are his points:

1) more income uncertainty means small business is less likely to buy real estate
2) more taxes paid = less after tax income = lower prices can that can be paid for housing
3) selling homes to lock in tax free gains to provide flexibility in their newly challenged business finances
4) rental smaller commercial buildings prices drop – fewer tenants in business or that can pay the overheads (surplus of commercial space)
5) owner occupied business premises price drop – businesses closing as owners retire earlier
6) business owners’ homes sold as business earnings drop necessitating lifestyle retrenchment
7) businesses down sized or closed = job losses = fewer qualifying buyers

all the points listed apply to the small business I know in Ottawa but I would like to emphasize point 5. The man who built the business from the ground up is in poor health, if he retired the business would be restructured, there would be less business, fewer employees and less real estate.

#117 HDJ on 08.30.17 at 10:00 pm

To put it simply, when the CEO-to-worker pay-ratio is 354-to-1, and fifty years ago it was 20-to-1, it means that something is rotten in the state of Denmark.

The ratio in Canada is 159, and that is only for the top 100 CEOs. Not indicative of firms where 90% of us work. — Garth

#118 jim on 08.30.17 at 10:02 pm

#102

“So it logically follows that if RE prices collapse, that the value of the other side of the balance sheet, the debt that is against RE, must collapse. Thus, it will be not only the owners of RE that suffer in the market collapse, but also, and probably to a lesser extent, the *loaners* to the RE owners that will suffer.”

Umm….. no. It is not ‘logical’.

As I have explained many times on this blog, none of you seem to know what the word ‘logical’ means. You seem to have learned it from Dr Spock.

This inference is not deductive, hence not ‘logical’. Even worse, it is clearly false.

Why? Because in a world where governments can intervene to save financial institutions and buy their assets at book value (not market value), it is not necessarily the case that lenders take losses when RE tanks.

In the GFC, some banks holding mortgage securities were bailed out at the book value of those securities, which was well over the price that anyone would pay on the market.

In Canada, lenders MIGHT take losses, but with government backstopping them, you never know.

PS: Garth, Morneau flew out to Seattle to meet with Buffet prior to his investment in Home Capital. Do you really think Buffet would stick his money in a tottering company without some government guarantees? He is no fool.

That flew-to-Seattle-to-gift-Buffett yarn has been expertly debunked. — Garth

#119 Smoking Man on 08.30.17 at 10:05 pm

Ebes and flows and yellow snow.
Depressed. Last weekend of summer.

#120 jim on 08.30.17 at 10:09 pm

Canadians are obsessed with real estate, because for 80% of them it is the only route to wealth.

Outside the bloated governments / crown corps, a small financial sector, and a few coddled cartels (e.g., the banks, telcos), Canada offers nothing in the way of good careers. Venture capital is almost impossible to come by, and there are very few high paying jobs in private sector companies.

People are obsessed with housing because it is a means of deploying massive leverage in pursuit of large gains.

I graduated from a very selective high school in the west side of Vancouver. Almost everyone was a high achiever in my small cohort, and most of my classmates went on to become doctors, lawyers, engineers, architects, scientists, etc.

Despite that, the wealthiest person in our class was a fellow who bought a house in Vancouver at the right time. Middling career, mediocre post-secondary… but he has outearned the JDs, PhDs and MDs significantly by virtue of buying a house a year out of high school in the Dunbar area, with help from his parents.

That’s the kind of story that turns most Canadians into slobbering, gibbering fools willing to toss their lot in with the nearest mortgage broker. Barring a plum public sector job (e.g., Ontario Power Generation and its 5 to 1 pension contributions), there’s really no other feasible way in Canada to get rich.

In contrast, talk in the USA is about jobs and businesses. Sometimes about houses, but in general people are not rejoicing at the massive runup in prices in places like the Bay Area. Different mentality.

#121 Pete from St. Cesaire on 08.30.17 at 10:14 pm

Vancouvers full of ex Torontonians who would never go back, hot muggy, cold windy, polluted lakes.
———————————————————
Never go back? Reminds me of when I moved from Quebec to Ontario 14 years ago. We’d been living there about 3 months when I mentioned to a guy that I was from Quebec and new to the area. He asked how I liked it and I told him that we would give it a year or so and move back if we didn’t like it. In the typical arrogant Ontario way he said “That’s a laugh. You’ll never go back. I can guarantee you that. And what’s more, you’ll wonder why everyone doesn’t move here too. No, you’ll never move back. No one ever does and you won’t be doing so either”. 3 years later we moved back. Best choice ever. We’ll never move out of Quebec again.

#122 why’s there such a disparity of wealth on 08.30.17 at 10:14 pm

#97 why’s there such a disparity of wealth

No, but it’s a good place to start. You can’t change the world. But you can change you. — Garth

—-

Every single person I know that arrived here with nothing in the 50s had their home and accumulated substantial wealth. Often as single earners of the family.

Regardless whether they were business owners, employees of the government or corporations, doctors or other professionals.

I never heard them bitching against each other based along those lines. There was no class warfare talk.

Their second generation off-springs are like the commenters here.

Somebodies apparently didn’t get the memo and could and DID change the world.

That changed world apparently could and did change the off-springs, too.

Out of the blue.

We can’t change that, I guess. We don’t need to know why, either.

The off-springs should just simply change themselves back. Like the budget that balances itself.

#123 Randy on 08.30.17 at 10:15 pm

Imagine a world with Small Government and low taxes

#124 Interstellar Old Yeller on 08.30.17 at 10:17 pm

Found out today I’m acquainted with another family who bought at the top and have now taken a 20% haircut. Ouch.

Social conditioning to own a house is strong, though. People still ask us about buying real estate, despite the recent huge drop in values. If prices fall by more than half, we’ll consider vultching. Truthfully, I’m increasingly enjoying the possibilities that are opening for us by having all our wealth in financial assets. Middle age spent having fun with my family and pursuing passion projects sounds way better than endless home maintenance and responsibility.

#125 Dissident on 08.30.17 at 10:18 pm

#28 Dr. Eisen on 08.30.17 at 6:29 pm

Oh God, I think I threw up a little in my mouth.

My Canadian Dream is that I never know a douchebag who drives a $97,000 car. Howbowdah.

#126 BillyBob on 08.30.17 at 10:20 pm

#5 MF on 08.30.17 at 5:32 pm

Debt levels are so high not only because people believe houses will go up forever (so far they have been correct), but also because in order to purchase at today’s prices most people have to take on debt.

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

No. No one is ever “forced” to take on debt. It is a choice. I hate this mindset of victimhood by tying it to a purchase one can’t afford. No one HAS to purchase a house.

#19 Mike on 08.30.17 at 6:09 pm
.
Incomes haven’t increased proportional to inflation(including housing).

Middle class is taxed to death, while upper middle class and wealthy allowed all kind of loopholes to avoid taxes. Middle class only get 55% of paycheck after paying for taxes, this and that deductions. Rich saving all that money under corporation umbrella.

What else is expected other than society under debt, while rich save their money in corporations and pay dividend tax on their incomes, and expense the sh*t out of their personal spend.

Middle class don’t get to expense dinners, and sprinkle income with spouses/kids to expense it.

No wonder society is all divided. And then we say you are jealous……..Ha. Actually rich are jealous if they see middle class raising voice. How come that poor get a $1 raise in wage if I dont get to make $100,000 extra and get to cheat on my taxes?

I paid the corrupt politicians, not them.

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

Your whole ugly rant is just simply loser envy. The top tiers of income earners pay far more in tax than the middle and lower tiers. It is a simple statistical fact. Try removing or drastically reducing their contributions from the tax revenue and watch what happens.

I was once a tax-paying Canadian resident. At this point in my career, if I was working in my occupation in Canada I would definitely be in the top income tax bracket. But I left, so now Canada receives zero dollars in tax from me (other than the sales taxes on my frequent visits).

I could return. But it is PRECISELY these utter loser mindsets: victimhood, entitlement, jealousy, and confiscatory, that make me absolutely determined to never give a dime again to the Canadian Regime.

In other words, there is a straight line between this hell-bent drive to socialism and the flight of capital. And I’m only one tiny, insignificant example of it. It is not some threatening posture, it is reality. Draining your economy of its most entrepreneurial people is foolish almost beyond description.

Why people choose to embrace philosophies that have been discredited over and over again always amazes me. Canada as a nation is like a pimply, sullen adolescent in a room of adults. Sure that it knows more and has fresh, never-before-thought-of ideas that the stupid adults just “don’t understand”.

But thank you, at least, for providing such clear reinforcement of why removing my income, savings, and investment from Canada was such a good choice.

#127 Fg on 08.30.17 at 10:21 pm

#21 Fran Deck Jr. on 08.30.17 at 6:11 pm
Couldn’t agree with you more…
You could feel the socialism, border line communism, in the air. Canada, a once proud country with a future, has now become a pawn in the globalist agenda and we have no line of defence with selfie, sock, idiot trudope and his incompentant gang of misfits.
God forbid, Should these idiot libtards win a second mandate, my family will be out of here… and we’re not alone. Good luck luck to the remaining suckers who’ll be stuck paying exorbitant taxes to fund illegal migrants and the rest of the country’s communist agenda.

#128 Jay on 08.30.17 at 10:23 pm

#85 MF
Yes, sorry for the assumption and if I offended you. Perhaps I am overly sensitive to the meme that I am a bad, greedy person for employing people.
Good luck on your investing and taking ownership of your financial well being.

#129 Smoking Man on 08.30.17 at 10:24 pm

https://youtu.be/SrvO4baXLWI

#130 Dissident on 08.30.17 at 10:30 pm

#114 The man with credit? on 08.30.17 at 9:41 pm

Dude, same thing happened to me. I complained to BMO that my Mastercard interest was chipping larger chunks than anticipated, after taking a year off to go to school again and racking up some meager living expenses, so clearly not employed (what a dumb idea), and they quickly guided me to considering a line of credit “lower interest rates for you”. How kind of you, giving me more appealing forms of debt, when I’m unemployed, debt that I don’t feel the urgency to pay off so quickly. :/ Can’t wait to find another wage slave job. I hate debt. Even $1,000 gets me antsy.

#131 Ian on 08.30.17 at 10:35 pm

Garth – of course it has. That’s why I’m buying it now. Would I buy when it’s in a bear? I shorted it.

You are operating at the end of a fictional eight year bull market. It’s based on absolute nonsense and fiction. You said ‘don’t bet against America’. I bet against America in 2000 and in 2007, and trust me, this bubble that will lead to an unprecedented USD crisis will make those bears look like a cakewalk.

I told you already that US equity valuations are at 1929-pre depression levels. That doesn’t matter?

#132 Cowtown Cowboy on 08.30.17 at 10:37 pm

Looking at renewing my mortgage this fall, going from a 5yr 2.89 to what looks like a 5yr 3.05…lock it in Garth?

#133 Welcome to Slurrey on 08.30.17 at 10:39 pm

Built a house in 2007 in Slurrey, sold it in 2010 ….. did not make a fortune, but yes still made a profit of around 50,000 (tax free as it was claimed as a primary residence). If I would have held onto that property and sold now, oh man would have made close to 500,000 because of the appreciation in the last few years. I have stories of people losing money in the yvr housing market, making money, and some just breaking even. Can’t time it , I’m sure people that only had one residence and sold pre 2015 and followed Garths advice (and live in YVR) would be kicking themselves right now ……….

#134 Fg on 08.30.17 at 10:45 pm

#50 Dave on 08.30.17 at 7:05 pm

Interesting … I didn’t know that Antifa had a troll division that was actually semi literate and couldn’t get their point across without using violence.
You must be a globalist paid shill- has Soros sent your payment yet?

#135 Smoking Man on 08.30.17 at 10:46 pm

My education wasn’t a dude with make up. Mercury don’t count. Love him.

https://youtu.be/13KcdxpRn4Y

#136 HDJ on 08.30.17 at 11:21 pm

117 HDJ on 08.30.17 at 10:00 pm

“To put it simply, when the CEO-to-worker pay-ratio is 354-to-1, and fifty years ago it was 20-to-1, it means that something is rotten in the state of Denmark.”

“The ratio in Canada is 159, and that is only for the top 100 CEOs. Not indicative of firms where 90% of us work. — Garth
………………………………………………………….

The 354-to-1 ratio comes from a 2015 Scientific American article – it’s the average for S&P 500 Index companies. Do you know what the average ratio is for the heads of companies most of us work for? My guess is that it too indicates toxic inequality.

Tap dancing around the problem of today’s income and wealth inequality isn’t going to make it go away. There’s far too much inequality in Canada. I think the Liberals recognise this and are attempting to reverse the trend. Good for them.

#137 Dee on 08.30.17 at 11:22 pm

Pretty sure this is the video of morneau talking hcg/buffett

http://www.bnn.ca/finance-minister-bill-morneau-vows-to-stay-closely-focused-on-housing-1.810599

13 minutes 5 seconds morneau talks meeting with buffett

#138 waiting on the westcoast on 08.30.17 at 11:35 pm

No, but it’s a good place to start. You can’t change the world. But you can change you. — Garth

Garth – you have a lot of great quotes and quips, but this is the fundamental truth that most people miss. +1

My parents spanked me with a similar line when I was in my mid twenties and now I try to keep looking for what I can do to make my and other people’s situation better. As another commenter pointed out, entrepreneurs adapt. They don’t blame others, they solve the problem.

#139 Bankish on 08.30.17 at 11:44 pm

“Like religion, politics attracts kooks and grifters because it is a field where results have a mysterious and hard-to-trace relationship with the time, effort, and cash invested in them. Grifters use this to create lucrative and low-effort consulting jobs. For kooks, the comfort is more psychological. If a kook can convince himself — or better yet, others — that Freemasons, Jews, or Cultural Marxists run the whole world, he’s suddenly relieved of the burden of explaining to himself and others the shipwreck of his own talents and ambitions.”
I think this paragraph also explains the people that refuse to save and invest for their future. They shun the responsibility and have to later avoid owning up to their own situations by playing mind games.

#140 Hawk on 08.30.17 at 11:46 pm

<<<>>>.

Good points.

About 20 years ago the Venezuelans also “believed” a lot of similar things. Today they are eating out of dustbins, waiting hours in queues for toilet paper etc etc……..of-course it won’t happen to the proletariat out here, they’re special…….their mom always told them so :-)

#141 Gentle ,Loving Kindness on 08.30.17 at 11:51 pm

China is installing a factory in Little Rock AK that will make shirts. It will cost about $0.33 each to make the shirts, and the expected annual volume will be around 23 million shirts. The factory will be installed with about 350 shirt making robots. They will be labeled as “Made in America”. There is an irony in here somewhere, and this just the tip of the iceberg of the disruptions to come for labor.

https://www.bloomberg.com//news/articles/2017-08-30/china-snaps-up-america-s-cheap-robot-labor

#142 LOL on 08.31.17 at 12:11 am

The wealthy still have to live somewhere though. Do they rent the homes they live in, or buy them outright?

We they gifted from previous generations?

I think it’s more complicated than just “the wealthy invest”.

……….

the majority OWN, not rent

#143 Future Expatriate on 08.31.17 at 12:16 am

“it was the best of times; it was the worst of times.”

Income disparity is not good. The wise find a way to fix it, one way or the other, or else.

America is closer to revolution than anyone knows.

Either that or a very short diversionary nuclear war with China over the nuking of NK. Tossup at this point.

The farther we get from the past, the closer we are to its inevitable repeating.

#144 BS on 08.31.17 at 12:18 am

#17 cynical millenial on 08.30.17 at 6:07 pm

I don’t think it’s surprising to anyone that the rich own more financial assets. The reason my generation is barking about it is the gap continues to widen. Anyone whose played monopoly or reads this blog knows that having wealth begets more wealth.

The question is whether we want to live in a society where the gap continues to widen. Many of us say we don’t, and see increasing the tax burden for the people who hold the wealth as one of only a few practical options.

It is pretty clear the wage slaves won’t be happy until everyone is living pay cheque to pay cheque just like them. Tax the rich so they are no longer rich and reduce the wealth gap? How about increasing your wealth instead!

I remember back when I was a wage slave. I looked at people who were successful, had more wealth and ran their own business and made it my goal to have the same. Rather than try to bring them down to my level I emulated them and moved up. Note to wage slaves: your life will not get better if everyone is poor. Changing the rules so it is more difficult for people to be successful won’t help you. It will only make it more difficult for you to achieve success. Have so many people given up on life they want everyone to fail?

#145 Figmund Sreud on 08.31.17 at 12:22 am

Just to our south, rich guys are celebrated. They elected the ultimate one to be leader. He’s about to cut corporate and personal taxes, including for the wealthy. And the deplorables cheer.
______________________________

Well, … the Americans are untethered from reality! It’s true, … The Atlantic claims so. Short snip:

… [T]he solidly reality-based are a minority, maybe a third of us but almost certainly fewer than half. Only a third of us, for instance, don’t believe that the tale of creation in Genesis is the word of God. Only a third strongly disbelieve in telepathy and ghosts. Two-thirds of Americans believe that “angels and demons are active in the world.” More than half say they’re absolutely certain heaven exists, and just as many are sure of the existence of a personal God—not a vague force or universal spirit or higher power, but some guy. A third of us believe not only that global warming is no big deal but that it’s a hoax perpetrated by scientists, the government, and journalists. A third believe that our earliest ancestors were humans just like us; that the government has, in league with the pharmaceutical industry, hidden evidence of natural cancer cures; that extraterrestrials have visited or are visiting Earth. Almost a quarter believe that vaccines cause autism, and that Donald Trump won the popular vote in 2016. “

Enchilada:

How America Went Haywire
https://www.theatlantic.com/magazine/archive/2017/09/how-america-lost-its-mind/534231/?utm_source=fbb

Enjoy the read, … or not!

F.S. – Comox, BC.

#146 BS on 08.31.17 at 12:28 am

#117 HDJ on 08.30.17 at 10:00 pm

To put it simply, when the CEO-to-worker pay-ratio is 354-to-1, and fifty years ago it was 20-to-1, it means that something is rotten in the state of Denmark.

The ratio in Canada is 159, and that is only for the top 100 CEOs. Not indicative of firms where 90% of us work. — Garth

If they cut those 100 CEOs salary to equal 20 to 1 how would that help you or the workers? The extra money would go to shareholders (assuming they got the same performance with a lower paid CEO). I am guessing you don’t own the shares so why do you care? Those who do own shares and do have a say in CEO salaries seem to be okay with it.

#147 Mark on 08.31.17 at 12:38 am

“In Canada, lenders MIGHT take losses, but with government backstopping them, you never know.”

It took me a few reads of your post to understand what you were talking about. So please forgive me if I still don’t properly understand.

The ‘loaners’ in the context I spoke of are the savers. The people or businesses who have earned their money, and lent it to the banks, who in turn, parcel it out to borrowers in the form of mortgages, loans, HELOCs, etc.

So you can think of two entities existing in the economy: loaners, who are, by definition, savers. And borrowers, who by definition, are spenders.

Banks act as an intermediary between the loaners (ie: the people who have saved to buy GICs, etc.), and the borrowers.

I agree with your statement, that life will be good for the intermediaries, the banks. CMHC will pay them back at 100 cents on the dollar for defaulted subprime mortgages that fall under CMHC subprime mortgage insurance. And they’ll foreclose on anything else, taking possession at prices closer to cyclical bottoms, deeply discounted collateral.

So who will suffer? It will be the borrowers, and it will be the savers. Over time, the savers will have their claims devalued, likely through a very extended period of ZIRP/NIRP. And of course the borrowers will be removed of their equity.

So owning Canadian banks, as intermediaries, probably isn’t a bad thing. Sure, they won’t be the absolute best performers on the TSX (they weren’t in the 1990s either, only quadrupling over the decade, while the techs did considerably better), but they should still perform respectably.

Does this all seem “logical” to you?

#148 Vampire studies GMST on 08.31.17 at 12:58 am

71 trojan – my wage, management income, small business dividend income and rental income is all taxed at the same rate. And I still need an accountant to figure it all out!

#149 Frank on 08.31.17 at 1:04 am

From #113 Frank:
Soon China will be the world’s biggest economy. Why would you not want a little exposure? — Garth
———————————————————-
Exposure to the benefits of doing business in China, can be had by investing in any company, such as Apple that has operations there.

China is a dictatorship, with extensive corruption. The publication of assets of the top leadership has been banned. These are assets in other countries, that couldn’t have been accumulated through their regular employment. As a business becomes successful, it is subject to the whims of local officials.

Buying stock or by extension ETFs of stocks traded in mainland China is simply gambling with the odds on the other side.

Many Chinese companies are US traded. The issues there are more visible, and you can look at the SEC enforcement actions.

#150 Smartalox on 08.31.17 at 1:12 am

Does anyone else find it ironic that on the one hand Garth feels strongly that ‘those who assume great risk’ self-incorporating, should not be burdened by punitive taxes, but then turns around and chastises people for taking on even greater risk, by putting all their retirement savings into their homes.

Of course, those that profit from taking that risk to invest in property still get treated favourably by the tax man, with the principle residence exemption for capital gains.

#151 Nonplused on 08.31.17 at 1:12 am

“Broad based economies always grow”

So long as the availability of the necessary raw inputs especially energy also grow. The ability to do that now looks particularly uncertain. Has since 2006. Sure they fixed it with the shale thing, but the jury is still out as to whether that is actually an economic energy source or we just wasted a couple hundred billion fooling ourselves again.

#152 5Inatrailer on 08.31.17 at 1:16 am

Long time lurker (6 years…?) first time poster.
I can see how rich people spend the portions of their portfolio on real estate- they have so much dough you can only spend so much on a house.

I think a point that is missed is HOW they got to be rich. I highly doubt it was through 7% conservative investing.
Protecting wealth? Absolutely. Creating wealth- not likely.

Most were probably small business owners; Tims Hortons, subways etc.

For me, we live beneath our means (#trailerlife) but make 6 figures on a side job with 30% growth y-o-y while still working ft and earning that sweet Db pension.

Though what my partner makes in a month, my pension pays in a year so maybe I won’t stay until I get my Q factor.

Either way, investing, like everything in life is about balance. Thanks to all the normal humans who post here.

#153 Karma on 08.31.17 at 1:25 am

#28 Dr. Eisen on 08.30.17 at 6:29 pm
“I’m troubled by the way you speak about Canadians that way, Garth.

97.9% of land in Canada is inhabitable, and further development is restricted in the Greenbelt, so house prices only have one way to go -UP!

owning a home in Toronto or Vancouver is the Canadian patriot way for our country.

Marrying an independent career-oriented spouse and driving a $95,000 2017 model of Mercedes or Porsche SUVs IS THE CANADIAN DREAM that 350,000 immigrants strive for in our great country.

If you were my patient, I would sign a Form One so that I can have you evaluated under the Ontario mental health Act.

No one should badmouth Canada, because we are the greatest country in the world.

Toronto is ranked #1 by The Economist as the best city in the world to live in.

Demand is greater than supply in Toronto…our great city of Toronto is the financial and technological hub of the world! It is the best city in the world to live in!!!!!”

Lol. who knew doctors had a funny side.

#154 Howard on 08.31.17 at 1:26 am

#42 Willy H on 08.30.17 at 6:54 pm
#22 FOUR FINGERS WATSON on 08.30.17 at 6:12 pm

Canada used to be a great country but Turdo #1 killed it. Turdo #2 is picking the corpse clean.

___ ___ ___ ___ ___ ___

Didn’t Harper and his band of Reformi-Con’s run serial deficits financed on irresponsible tax cuts to pay for billions in universal child tax credits to buy votes? A page torn right out of Mike Harris’s Ontario playbook!

Built lot’s of first class community hockey arenas (for the upper middle class kids to play in) and gazebo’s!

Harper’s band of misfits managed to increase our national debt by $120 billion in economic boom times.

A stunning legacy.

—————————

Did you seriously just state that Harper led during global economic boom times?

I think the famed low-information Liberal voter has just gone full retard.

#155 Smartalox on 08.31.17 at 1:42 am

The real issue isn’t income inequality, but inequality in wealth, or more specifically, inequality related to net worth.

It’s not so much that the rich keep getting richer, but that the poor keep assuming debts. It doesn’t matter if your salary is $50,000 per year, or $150,000, if you’re carrying debt, you’re going to do worse (and you’ll soon do a lot worse) than a peer without debt – even if they don’t have luxuries or high-earning investments.

The other thing that sets successful people apart from people who bitch about the unfairness of life, is that successful people change their situation to suit their needs. Tax changes coming? Adapt. Make your changes and live with them. And not according to some of the histrionics posted here. Often just using the options that are available to them.

Some recent job changes saw my family’s income increase by 30% in the last year or two, but years of accumulated, unused, RRSP contribution room – from dozens of years when I didn’t have any extra money to contribute – has kept our tax bill lower now than it was when we made a lot less income, and as a result were in a lower tax bracket.

That’s right: I make 30% more income, rise up into a new tax bracket, but pay less tax overall now, because I increased my RRSP contributions.

At the time, I recall I was disappointed by this government’s decision not to raise the TFSA limit to $10 000 per year. But I also realise that if that HAD happened, I’d probably be paying more now in taxes to this government by topping out my TFSA with after-tax dollars, than I do now, by making my own – and my spouse’s RRSP contributions.

#156 Midnights on 08.31.17 at 3:06 am

Love the site.

http://charleshughsmith.blogspot.ca/2017/07/the-toxic-fruit-of-financialization.html?m=1

#157 Bloke in Olde England on 08.31.17 at 3:26 am

It’s a shame that Canada seems to be wandering down the “gut the rich” route that the UK is embarked on as well. Except you people are further on, going quicker, I think. It won’t end well.

The actual gap between the wealthiest and the poorest doesn’t really matter in the real world. It’s the wrong thing to focus on but politically-driven Lefties like your Trudeau and our (shudder) Corbyn love it.

What matters is that the poorest are getting wealthier relative to their antecedents. If that’s happening (and it cannot be denied), it’s because the economy is booming with opportunity and the rich are getting richer. Good stuff is happening, peeps – let it happen!

#158 jane24 on 08.31.17 at 4:31 am

The middle class in the Western world are being destroyed by globalisation (rise of the cheapest provider of a good or service no matter where they are in the world) and automation. Non-public jobs are disappearing every day but no-one seem to be adding them up. Brother in Edmonton says the other shoe will be dropping soon. Wonder if it will even make the papers.

To date few have noticed in Canada as the paper wealth in their houses have insulated them from reality. The vast perceived wealth of the house makes them feel rich so they spend rich. Soon this wealth perception will be replaced by reality and it will be a shocker for many.

I was home for a month in Canada recently and other than a few friends who are RE agents most of my lot have no disposable money at all. They just don’t know it yet. Sad.

#159 FLHTK on 08.31.17 at 5:57 am

#23-grey dog
So what we are suppose to live like hermits? Not enjoying our lives while we still have our health and can get out and enjoy things? Sounds like a great plan to me save save save to have a million plus in the bank that you can’t spend or enjoy because your old and achy! Most of us have mortgage and car payments and bills….if we lived at home that might be possible.
Nawww I think most of us young folk are good with having 750k in retirement, eating the odd lunch out and enjoying life while we are good and healthy!
750k on top of my DB pension should get me by…..oh my wife also has a DB pension as well….
Enjoy old age and your million plus…

#160 Midnights on 08.31.17 at 5:59 am

Coming to a country near you.

https://www.armstrongeconomics.com/armstrongeconomics101/economics/germany-increased-tax-collections-4-3-1st-half-2017/

#161 Wrk.dover on 08.31.17 at 6:32 am

ACE GOODHEART:

You have made some heavy duty statements in the past week or so.

I never know what I don’t know, until someone comes along and tells me.

So thank you for sharing the old boy network stuff.

Can’t decide whether to change my handle to Pollyanna or Bambi.

#162 Dharma Bum on 08.31.17 at 6:43 am

#7 Keith

Sorry.

You are far too intelligent and logical to participate in the usual drivel-fest that this comments section is.

Get out.

#163 WillyH on 08.31.17 at 7:24 am

#144 BS on 08.31.17 at 12:18 am

Stopped reading your post at the term “wage slaves”.

Speaks volumes about how some of the entitled nouveau-rich view the folks who actually generate the wealth they covet.

No wonder there is so much back-lash against real or perceived inequity today.

#164 WillyH on 08.31.17 at 7:31 am

#154 Howard on 08.31.17 at 1:26 am

Did you seriously just state that Harper led during global economic boom times?

___ ___ ___ ___

The World Financial Crisis of 2008 was little more than a speed bump for the Canadian economy as the energy sector and real estate motored on virtually unaffected.

Harper’s deficits were largely self-engineered as they attempted to employ the 1980’s neo-con “starve the beast” theory.

They pulled $15 billion per year out of government coffers with the GST cuts that they never managed to find a way replace, even with robust economic growth outperforming the G7 year after year.

#165 John54 on 08.31.17 at 7:31 am

Garth mate, the rich have a greater proportion of their wealth in the stock market because they have more wealth to put it there. They still own real estate so it’s not the issue.

Most Canadians live pay check to pay check. How is minimum wage going to fund a 10k TFSA? It’s only the rich who can afford it, and they’ll have yet another way to avoid taxes.

Social mobility in the US is almost dead, and it’s better in Canada because of progressive taxes. Canada is worse off when people avoid progressive taxes by paying dividends to their spouses.

#166 Manitoba Whale on 08.31.17 at 7:41 am

The next generation (broke millenials)….
*****

Just my theory. If this blog were available 50 years ago when Canada was 100, we were celebrating the Centenial, and I was transitioning from cloth diapers, the Hip Boomers were changing society and were never going to Work for the Man.
Patience grasshopper, your time will come. You will be envied generation in 25+ years.

#167 Big time rich guy on 08.31.17 at 7:54 am

Dude!!!!

“You’re richer than you think!!!!”

Just get a mortgage and pay monthly fees on your chequing account!!! WOOT!!

#168 Manitoba Whale on 08.31.17 at 8:08 am

#91 perspective on 08.30.17 at 8:49 pm
Truth be told, we don’t have tax problem, we have a spending problem.
*****

Absolutely.
The governments of Canada, usually federal and provincial, are losing the faith of the tax paying population. Why they stubbornly go down this path because of some mythical allowable debt/GDP ratio is absurd.
I just wish the Martin Liberals won and not the Trudeau Liberals; we could then have a reasoned approach regarding fiscal responsibility.

#169 2 Cents Canadian on 08.31.17 at 8:25 am

Winners will always eventually figure out how to win, successful people will always eventually figure out how to succeed. They can’t help it …. its in their bones. Change the rules all you want. Tax them, kick them, knock them down … they just keep getting up and figuring out how to do better than most. You don’t have it, they do …. it’s as easy as that …. don’t punish them. We all wake up to the same world as each day. We all live under the same legal system and rules. No excuses fly with me. What did they do to get where they are today and what did you do to get where you are? Educate yourself, make a plan and execute it. And if it ain’t working … tweak it a little. But the days are long over of just waking up in the morning, stumbling out the door and making a good living and having a good life. It’s a trickier more complicated world now …… but still lots of opportunity.

#170 PokerCat on 08.31.17 at 8:38 am

“So where did this come from? Just to our south, rich guys are celebrated. They elected the ultimate one to be leader. He’s about to cut corporate and personal taxes, including for the wealthy. And the deplorables cheer.”

Just to our South, the deplorables are brainwashed into thinking that they will soon be joining the rich guys. They think they should support them, because they’re about to join them. Sad really, since upward mobility in the US had been stifled.

Ironic that generally, Canadians (correctly) believe that taxes should be progressive, and yet they have a better chance of moving up than their American cousins.

Read “Dream Hoarders” by Richard Reeves. [troll]It’s a great how-to book showing you step-by-step how to keep the deplorables in their place, and your family in the upper and upper-middle class. [/troll]

#171 Gravy Train on 08.31.17 at 8:46 am

Canada’s Q2 GDP rose a stunning 4.5%. Can’t wait to see how Mark spins this news!

#172 G&M all over Morneau on 08.31.17 at 8:49 am

https://www.theglobeandmail.com/news/politics/proposed-federal-tax-changes-spark-unprecedented-anger-among-businesses/article36134111/

https://www.theglobeandmail.com/report-on-business/rob-commentary/how-the-federal-tax-reform-proposals-miss-their-target/article36129570/

#173 BR E19 1-D-1 on 08.31.17 at 8:52 am

‘If the comments on this pathetic blog again yesterday indicate anything (God have mercy if they do)…’

My late father remarked about thirty-odd years ago that the average Canadian isn’t terribly bright. I’ve yet to see any evidence he was wrong.

#174 AlexMakedon on 08.31.17 at 9:03 am

Garth you make the claim that “small business people, docs, lawyers, IT dudes and entrepreneurs who create half the jobs.” Do you have the data to back this up?

#175 Smoking Man on 08.31.17 at 9:04 am

Forget 1/4 spike in rates in Canada.

I’m calling 1/2 % spike in rates.

GDP 4.5 percent on quarter in the three months to June of 2017

https://tradingeconomics.com/canada/gdp-growth-annualized

#176 Victor V on 08.31.17 at 9:10 am

Cabbagetown loft sells under asking as market softens

https://beta.theglobeandmail.com/real-estate/toronto/cabbagetown-loft-sells-under-asking-as-market-softens/article36124213

#177 Victor V on 08.31.17 at 9:15 am

Household spending, exports fuel 4.5% growth in Canada’s economy

https://www.thestar.com/business/economy/2017/08/31/household-spending-exports-fuel-45-growth-in-canadas-economy.html

OTTAWA—The economy surged past second-quarter expectations with growth at an annual rate of 4.5 per cent, giving the country its best start to a calendar year since 2002, Statistics Canada said Thursday.

Household spending and exports, particularly in the form of energy products, drove the increase in real gross domestic product, the agency said.

The sturdy GDP data provides the latest evidence the 2017 momentum has continued to build and arrives with the Bank of Canada widely expected to once again hike its benchmark rate in the coming weeks.

Citing the strengthening economy, the central bank raised its rate to 0.75 per cent from 0.5 per cent in July. That was its first rate hike in seven years. Its next rate announcement is scheduled for next week.

#178 Edjumicated dude on 08.31.17 at 9:17 am

#64 Smoking Man on 08.30.17 at 7:38 pm

Was watching TV news today. Try to avoid it at all costs. So they have freshmen week on the campus at Mcmaster. The duds start to talk. But they don’t sound like duds. Girly men at best. Now that’s this crop.
What do you think the boys starting grade 4 getting gender studies early will be like when it’s their turn for freshmen week. Or is freshmen now a tabo pronum.
Canada is doomed. Home school and save the country.
…………………………………………………………………..
OK first it’s spelled “McMaster” and it is a location where likewise individuals with a yearning for furtherance through education will absorb higher studies. Spelling and grammar for instance!

Secondly its dudes not duds. Cool guys are dudes unlike yourself you are a dud!

Third tabo is spelled “taboo”

Fourth pronum is spelled “pronoun”
Everyone has the right to be stupid, but you are abusing the privilege.

#179 Victor V on 08.31.17 at 9:30 am

Canada’s economy grows 4.5% in second quarter

http://www.bnn.ca/canada-s-economy-grows-4-5-in-second-quarter-1.843803

“When was the last time you heard of a 4.5-per-cent print on any kind of growth? I mean, you’re looking at China,” said TD Deputy Chief Economist Derek Burleton in an interview with BNN. “Since the mid-part of last year the economy has come back with significant life and it’s been great to see.”

“Canada’s second quarter let the good times roll, so much so that the country’s national humility has almost everyone assuming that this can’t last,” wrote CIBC Capital Markets Chief Economist Avery Shenfeld in a report to clients. “Odds of a September rate hike by the Bank of Canada are certainly enhanced by this report.”

#180 Stop complaining and listen for once on 08.31.17 at 9:35 am

“It seems to be lost on most people here that the bulk of 1%ers didn’t start that way. Just like you. — Garth”

This is the most important comment when it comes to 1%. Please read and re-read until you stop complaining.

#181 Victor V on 08.31.17 at 9:42 am

Canada’s GDP grew at 4.5% annual pace in 2nd quarter, fastest since 2011

http://www.cbc.ca/news/business/gdp-june-statistics-canada-1.4269811

Within minutes of the report coming out, currency traders started raising the odds that the Bank of Canada will hike its benchmark interest rate when it meets next week.

As it stands, traders think there’s about a one in three chance of that happening. Yesterday, the odds of such a move were just over one in four.

The likelihood rises to more than 85 per cent between now and the end of the year.

#182 DismalEconomist on 08.31.17 at 9:44 am

Do doctors create jobs or does an aging demographic increase demand for medical services? Do lawyers create jobs or does an increasingly complex legal and regulatory environment increase demand for lawyers? Do entrepreneurs in general create jobs or do those jobs exist because there is demand for a service and the entrepreneur responds to that demand?

If we exclusively look at the supply side of the picture we can argue soak the rich policies look silly. But employees are consumers and without them entrepreneurs don’t have sales. Every dollar in preferential tax treatment for the successful means one more dollar that has to be raised from their employees and customers.

As a result you get income inequality and anemic economic growth. The fact the wealthy invest in financial assets is because they have residual savings left over to do so compared to the average person, which is a byproduct of their preferential tax treatment. Level the playing field more and you’d see the middle class increase their holdings of stocks and bonds relative to their wealth in real estate.

#183 Calgary Rip Off on 08.31.17 at 9:50 am

Your comments on the idea of a set point?

Do you believe that each person subconsciously has an amount of income/assets they are comfortable with?

How is this relevant? I have repeatedly found playing poker online with free chips, after winning so many hands and having a “bank roll” of chips, I found justifications and patience with certain decisions that I likely wouldnt take with lesser chips.

Therefore, my hypothesis is that each person has a certain amount of wealth they can handle.

Lotto winners of large sums often counsel with a financial advisor before their first payment.

Therefore, all the whiners complaining about taxing the rich, my question is, can they even handle the money they are obtaining from that taxation?

And seriously, what is their motivation for the taxation? Greed, or ill health? For health matters, many many things cannot be fixed. I work in a hospital. Medicine is still barbaric. This is not anyones fault. It is the current state of things. Limbs do not regrow. Hearts cannot be regrown(yet) or harvested when they fail. You must have a donor and then deal with the mess of immune rejection, etc etc. So unless someone is in a dire strait of health difficulties, I really wish they would focus their energies on what they can do. If they have two arms, two legs, hands, eyes, and a brain, there is really no excuse. Get out there and earn the money yourself. Otherwise, be quiet.

#184 Grey Dog on 08.31.17 at 9:51 am

159 FLHTK
Ha! We hardly lived like hermits…dinners out meant going to a friend’s with pot luck. Therefore no overspending on restaurants. We camped from one end of Canada to the other.
Biggest drain on pocket book ever, fast food, restaurants, coffee shops.

Yes, multiple income steams are the secret to a comfortable retirement, including pensions and donating to CPP for forty years.

As I have stated before, do NOT rely on [email protected], get a financial advisor. (Hence, I get a doctor when surgery is required.). If you are financially gifted, I celebrate you, we didn’t get that gift, however, we were good at saving. Yet we still have our monthly spreadsheet meeting to make certain we will be comfortable during all phases of retirement.

So…now that I’m a grey dog, guess who we go on cruises and trips with? Yup, other savers, those friends that we met at work who brown bagged it, and saved, all were employed in the private sector.

#185 Eks dee Sipal on 08.31.17 at 10:03 am

Morneau is another banker puppet. Proof:

http://www.bnn.ca/big-banks-mop-up-mortgage-market-share-after-ottawa-devastates-the-competition-expert-1.842216?hootPostID=fbc234dfb0d191098a5656c9dc820f95

#186 Jewdacris on 08.31.17 at 10:04 am

The top 1% make 11% of the national income but pay 21% of taxes. The top 10% make 33% of the national income but pay 54% of taxes. The bottom 50% make 18% of the national income but pay only 4% of taxes.

For all the pinheads “Careful what you wish for”

It’s clear the Canadian government has done a piss poor job handling OUR money, what solution will giving them more solve? Allowing them to waste even more ?

Results speak louder than words.

#187 n1tro on 08.31.17 at 10:07 am

#136 HDJ on 08.30.17 at 11:21 pm

Tap dancing around the problem of today’s income and wealth inequality isn’t going to make it go away. There’s far too much inequality in Canada. I think the Liberals recognise this and are attempting to reverse the trend. Good for them.
———————————–
Yeah…I hope the Liberals goes after those evil athletes too. Dribbling a ball, slapping a puck, or just plain running really fast. Why do they get millions when I get nothing for doing the same on the weekends?!

While they are at it, let’s give musicians like Justin Bieber some comeuppance. Make him be a street buster again.

#188 HaHaHa on 08.31.17 at 10:36 am

Government is lazy and thus has to rob people who work of money. It is that simple. Throw in Liberals and this is exactly what you get. Like father like son its all about looking good and social justice crap. Canada is back alright. Now they need to rob people to pay for this social justice bullshit. Carbon tax did it fix anything? Dancing with people at parades? This country and its prime minister are an embarrassment. Yes like father like son. Liberals are a cancer. Ooops call the thought police guess I just made a hate crime offence.

#189 Mike in Toronto on 08.31.17 at 10:39 am

#154 Howard

It was not a “Global Economic Boom”, I don’t think anyone said that.

Oil revenue steadily increased under Cretien, they peaked under Harper. Canada is a resource economy and oil was mostly ~$100/barrel throughout Harper’s term.

Harper slashed spending during this boom period, lifted environmental controls and utterly abjectly and horribly failed to diversify the economy, instead pumping more oil and spiking more housing.

His successors, regardless of their political party, have a mess to clean up. Literally and figuratively.

#190 Eks dee Sipal on 08.31.17 at 10:41 am

Warren Buffet is working for the government? — Garth

No, you got it backwards.

#191 Mark on 08.31.17 at 10:57 am

“Canada’s Q2 GDP rose a stunning 4.5%. Can’t wait to see how Mark spins this news!”

If that were true, we’d probably see some ways of independently verifying such. However, all I see is a comatose employment marketplace, PPI that came in at -1.5% (ie: deflationary), and a TSX that is still struggling to even reach levels of over 9 years ago.

So something doesn’t add up. And without inflation being even remotely an issue (deflation seems more likely), there is no reason for the Bank of Canada to do anything to the policy rate, other than to contemplate lowering it. Meanwhile the yield curves on both sides of the border continue to flatten.

#192 Manitoba Whale on 08.31.17 at 11:01 am

Think out side the box may help a bit.
1.My wife has a pay as you go phone, a saving of $67 per month compared to mine.
2. Streaming vs cable/Sat, a saving of at least $50 per month.
3. 10 year old auto, not of the realtor brand, vs replacement every 3-5 years, $$per month.
4. Brew your own booze…well..
The point is spending less than you make and invest the rest. You will have a stash as GT has implored us to do. It does work. It does not meaning giving up the fun things in life.
Wage disparity, class war whatever. As my BIL said to me when I was jealous of a neighbours driveway, ‘dude, he is 20 years older than you’.
Give it time and the Dollars will take care of themselves.
Unlike the fed budget….

#193 Sandy Tyson on 08.31.17 at 11:07 am

To Grey Dog #23

I hear what you are saying. Our whole family, myself, wife and two adult kids are maxing out our RRSP’s, TFSA’s, non-registered money etc.

We are using laddering of long term strips at 3.5% to 4.5% these days and by each us saving 20 grand each per year, we will have about $2 million each over decades.

People have no real patience anymore. They want everything now, now! This is why they are in so much debt and have less and less real cash flow, income at the end of the day.

Having debt or alot of debt is the main reason we have found that keeps people down financially as it takes 100% of any real chance of first saving money and then compounding that money over years, decades.

#194 Eks dee Sipal on 08.31.17 at 11:21 am

#52 What’s The Point?

But most legitimate business owners like myself (been in business 5 years, have more than 100 clients, work 8-12 hours a day six days a week)…. I didnt pay any personal tax the year before last because my income was less than 30k.

Sounds like a FAKE income for the amount of hours and years you’ve invested. Or maybe one of thousands of landscaping businesses? Service-oriented businesses and especially those associated with Real Estate will have to soon realize that technology and consumer tastes are already rapidly dissolving available dollars for your offerings. Maybe these perceived unfair tax changes will allow you some time to reflect on the drastic and imminent changes to the economy at the doorstep. That could be a good thing in helping you to adapt or die.

#195 Smoking Man on 08.31.17 at 11:21 am

MSM totaly losing the battle for your mind.
Common sence over globalists agenda.
CNN declares Antifa facist.

Trigger waring. !!!!

https://youtu.be/kwAXoLjg5Ew

#196 fake dilemmas on 08.31.17 at 11:41 am

Do doctors create jobs or does an aging demographic increase demand for medical services? Do lawyers create jobs or does an increasingly complex legal and regulatory environment increase demand for lawyers? Do entrepreneurs in general create jobs or do those jobs exist because there is demand for a service and the entrepreneur responds to that demand?

This entire dilemma magically dissolves if you forget the term “job creation” and look at the economic act for what it is: buying labor capacity on the market.

It removes immediately all the ideological association which is exploited to demand tax credits, political capital, etc. for a simple economic transaction.

Applying the same to buy any other commodity or service would sound utterly ridiculous nonsense.

Buying electricity, copper, cloud computing does not create electricity, copper, cloud computing, it only create demand for such commodities, services.

#197 Damifino on 08.31.17 at 11:42 am

#173 BR E19 1-D-1

My late father remarked about thirty-odd years ago that the average Canadian isn’t terribly bright.
——————————————–

Your father need not have stopped at Canadians…

“It’s not getting any smarter out there. You have to come to terms with stupidity and make it work for you.”

– Frank Zappa

#198 Incubus on 08.31.17 at 11:49 am

“why’s there such a disparity of wealth?”

Because wealth was seized by the upper classes.

http://www.oftwominds.com/photos2017/wage-disparity3-17.jpg

#199 Eks dee Sipal on 08.31.17 at 12:03 pm

#154 Howard

You inserted the word ‘global’ and then proceeded to argue with your own insertion. Read better.

#200 Damifino on 08.31.17 at 12:05 pm

#142 LOL

The wealthy still have to live somewhere though. Do they rent the homes they live in, or buy them outright?
———————————-

If they are smart (and they probably are), they will rent.

The money tied up in a detached home in Vancouver West would be infinitely more secure and productive in a properly managed and balanced portfolio.

I am living proof of that. I find the idea of turning my portfolio back into a single cash-sucking lump of residential dirt completely abhorrent.

#201 Ogopogo on 08.31.17 at 12:06 pm

Garth writes: “Meanwhile wealthy people have adopted a different approach. Instead of owing the debt, they own it.”

Eminently quotable bit. Exactly my situation. Being a contrarian even as the sheep around me keep bleating about how much their shack has “grown” in value is a private joy. If only these sad sacks knew how much I’ve managed to grow my and my wife’s portfolio they would, well, hate me.

Life is good… on the renter-investor lane!

#202 Eks dee Sipal on 08.31.17 at 12:14 pm

#144 BS… “Note to wage slaves: your life will not get better if everyone is poor. Changing the rules so it is more difficult for people to be successful won’t help you. It will only make it more difficult for you to achieve success. Have so many people given up on life they want everyone to fail?”

Exaggerate much? Sounds like you are just afraid of competition by leveling the playing field and opening up opportunities for more people. Conservatives don’t want equality of opportunity. No, they prefer oligopolies, social hierarchies, closed end funds, segregation of education, high price of admission, and maintaining the status quo.

The real entrepreneurs value CHANGE, and embrace it. You are no better than those you criticize.

#203 Smartalox on 08.31.17 at 12:27 pm

@Edjumacated Dude: #178
re: Smoking Man #64

Don’t bother with Smoking Man, when it comes to ‘baiting’ he’s a master.

As a McMaster Alumnus, and a former Frosh leader, I can tell you that we chose to use the gender-neutral term ‘Frosh’ for the incoming class of students more than 25 years ago. Also, in that time frame, we did a lot to improve the experience and make it more welcoming for everyone. The thing is that we did it voluntarily, because that was who we were.

Now the people who did it voluntarily are in leadership, academic and management positions and are trying to do it by rules and regulations. The actual effects of this ‘on the ground’ are minimal, as people have been living these values for a generation.

For perpetual outsiders, angry twits with pre-conceived fantasies of ‘how men and women SHOULD behave’, these latest changes are an assault on their magical thinking.

#204 Victor V on 08.31.17 at 12:36 pm

http://torontostoreys.com/2017/08/jennifer-li-meet-agent/

What advice do you have for buyers and sellers in the competitive market of the GTA?

For buyers, I would say that even if they have to pay high taxes, it’s still a great time to buy because the market has returned to normal and we’re in a bit of a slowdown over the summer. In Bayview Village, you can buy a detached ranch-style home for $600,000, which I think is very decent for a family.

For sellers in this market, I think it’s better if they hold out. In this market, they will lose money — maybe as much as two years of income. It’s better to wait for the market to come back. Next year, around spring it will be much better. By then, the government may have a new policy in response to the market and more people will come back to it, so just wait and see what happens. In the end, it will be much better for potential sellers.

#205 Dolce Vita on 08.31.17 at 12:38 pm

#175 Smoking Man

Agree with you on the Oct. 0.5% rate increase, wow, 4.5% annualized!

Household spending +4.6%
Business investment +7.1%
Residential investment -4.7%

As usual, the Economists did not see this coming, quelle surprise.

#206 jess on 08.31.17 at 12:42 pm

” To remain hidden, some traffickers use illicit schemes, including complex webs of anonymous companies, that allow them to quietly launder the proceeds from their illicit activity and shield them from accountability.

This is the largest data set on human trafficking in the United States ever compiled and publicly analyzed.
Polaris analyzed more than 32,000 cases of human trafficking documented between December 2007 and December 2016 through its operation of the National Human Trafficking Hotline and BeFree Textline—the largest data set on human trafficking in the United States ever compiled and publicly analyzed. Polaris’s research team analyzed the data and developed a classification system that identifies 25 types of human ..”trafficking in the United States. Each has its own business model, trafficker profiles, recruitment strategies, victim profiles, and methods of control that facilitate human trafficking.

Download the report here, or view it below.
http://polarisproject.org/sites/default/files/Polaris-Typology-of-Modern-Slavery.pdf

“In 2011, the Justice Department broke up a Moldovan human trafficking ring that spanned fourteen states and used anonymous companies registered in Kansas, Missouri, and Ohio to hide the traffickers’ identities and launder profits. The criminals made $6 million by tricking their victims and luring them in with the promise of a better life. In the end, the victims — who were forced to live in overcrowded and substandard apartments — were made to work at hotels, casinos, and resorts while their wages were seized. To continue the exploitation, their visas were allowed to expire, so they could be threatened with deportation. In this case, the ringleader was ultimately caught but, unfortunately, this is the exception rather than the rule.

Across the United States, illicit massage parlors are often used as covers for sex trafficking operations. In a recent study, Polaris looked at massage parlors, primarily in the U.S., and found that over 6,500 of them are illicit businesses. In Fairfax County, Virginia — not more than 20 minutes outside of D.C. — they found 108 illicit massage businesses connected to 181 different limited liability companies (LLCs).

In Virginia, as with every other state, none of these companies are required to disclose the real people who own these companies and are benefitting from these crimes.

====================================
“Follow the money.” That is why we recently introduced the bipartisan Corporate Transparency Act of 2017.

The bill asks companies to name the true owners — also known as “beneficial owners” — at their time of incorporation.
http://www.nydailynews.com/opinion/unite-crack-open-shell-corporations-article-1.3442734

#207 Dups on 08.31.17 at 12:54 pm

Wealth distribution graph here is open to interpretation. We all need a roof. It just happens that there is nothing else left for the poor after they provide for their roof.

#208 Dmitry on 08.31.17 at 1:00 pm

Can someone explain to me why “income sprinkling” or income sharing (more appropriate definition) with the spouse is all bad/evil/criminal/cheating on taxes/etc. and should be stopped immediately in the name of “fairness” and make everyone equal, but spousal RRSP contribution is not? Why smart Bill and JT is not calling spousal RRSP contribution a criminal tax avoiding tactic because that’s exactly the same as income sharing with the spouse? End result is the same – less taxes paid.
Here is the SunLife web site that explains all about spousal RRSPs and there’s words like “tax break”, “lower the amount of tax that you pay collectively”, “will get a bigger tax break”, etc. – https://www.sunlife.ca/ca/Learn+and+Plan/Money/Retirement+savings/Should+you+consider+a+spousal+RRSP?vgnLocale=en_CA

Why???!!! What???!!! Tax avoidance!!! Cheating!!!! Criminal!!!

Or wait, maybe that’s next? So anyone complaining how small business owners are cheating criminals that avoid paying taxes by income sharing will be blamed cheats and criminals next in the name of “fairness”? Let’s see how they will react then and what kind of arguments we’ll hear.

#209 Yuriy on 08.31.17 at 1:05 pm

Just my 2 cents. This TITANIC of RE won’t stop anytime soon…
Lots of properties will be taken off the market in September and October so the unsold properties volume will shrink.
Then in September (midmonth) buyers will start buying again and there you go! Prices will go up again. Unless percent will be raised and further credit tightening occurs…steady and inexorable.

#210 jess on 08.31.17 at 1:26 pm

“the less sophisticated” = predatory/targets

Homeowner’s lawsuit says Wells Fargo charged improper mortgage fees
http://www.reuters.com/article/us-wellsfargo-mortgages-lawsuit-idUSKCN1B91VD

http://money.cnn.com/2017/08/11/investing/wells-fargo-small-business-credit-card-fees/index.html?iid=EL

=

Governor Andrew M. Cuomo today announced that the state’s new $7.6 million Community Restoration Fund has purchased the mortgages for 398 homes in a strategic effort to bring owners in targeted communities out of foreclosure and keep the homes from abandonment through renovation and resale where necessary. This approach is part of the Governor’s overall strategy to support homeowners, stabilize neighborhoods and prevent Zombie properties across New York State.
https://www.governor.ny.gov/news/governor-cuomo-announces-76-million-community-restoration-fund-program-help-prevent-foreclosure

#211 Robert White on 08.31.17 at 1:28 pm

I was born in Toronto, and have not heard the term ‘workies’ since I was 11, and was moved to the town that fun forgot by my CA father. If he had stayed in Toronto instead of moving to the town that fun forgot, I would have had enough of an inheritance to build my own single family home outside of the town that fun forgot. As it stands now, I will be a ‘workie’ for the remainder of my pathetic life!!!

Note: I am a fiscal conservative that never supported HarperCONS due to their incompetence with respect to CANADA’s economy. Temporary Foreign Workers, and Harper’s gubbermint ‘policy’ exacerbated the level of poverty that we are all experiencing today. Harper destroyed CANADA outright, and he was an illegitimate Prime Minister of CANADA. Anyone that worships the ground that Steven Harper walks on is an idiot, and financially incompetent IMHO.

RW

#212 gender-neutreal activism on 08.31.17 at 1:45 pm

#203 Smartalox on 08.31.17 at 12:27 pm

@Edjumacated Dude: #178
re: Smoking Man #64

Don’t bother with Smoking Man, when it comes to ‘baiting’ he’s a master.

As a McMaster Alumnus, and a former Frosh leader, I can tell you that we chose to use the gender-neutral term ‘Frosh’ for the incoming class of students more than 25 years ago. Also, in that time frame, we did a lot to improve the experience and make it more welcoming for everyone. The thing is that we did it voluntarily, because that was who we were.

Now the people who did it voluntarily are in leadership, academic and management positions and are trying to do it by rules and regulations. The actual effects of this ‘on the ground’ are minimal, as people have been living these values for a generation.

For perpetual outsiders, angry twits with pre-conceived fantasies of ‘how men and women SHOULD behave’, these latest changes are an assault on their magical thinking.

===

Ever occurred to you that there are gender-neutral languages? My mother-tongue is one of them.

Using he/she in English still doesn’t come automatically, I mix it up from time to time, it’s just an annoyance, really.

Having said that, gender-neutral language doesn’t remove anything that social engineers are aiming for, effectively it is just virtue-signalling exercise.

Those changes come from the heart. Who arrives there never claims credit or brags about it.

You can legislate laws, mandatory changes to use of language – but can’t legislate respect, love.

Those come from the internal paths of evolving spirits of individuals, forcing or trying to accelerate it creates push-back.

#213 Dolce Vita on 08.31.17 at 1:47 pm

#1 Dave D

True, self-employed et. al. represent 8 to 12% of the population in Canada, depending upon location.

Also true, is that Small Business employs 85% of Canadians.

Rather than sending whiny letters to the Minister about how slim profit margins are, how tough the business environment is and the inability to understand they are not the same as their company (2 different tax entities to Big G), the tact they should take is this:

Explain to the good Minister the exact number of jobs that will be cut in their firms and the $ value of capital investment cuts that will be made as a result of the Liberal assault on their personal income.

Typically, that has worked in the past to get the attention of Big G.

#214 Oliver Schulte on 08.31.17 at 1:57 pm

About the new tax proposals regarding tax planning using private corporations: The official government site with information about the consultation is http://www.fin.gc.ca/activty/consult/tppc-pfsp-eng.asp .

You had suggested sending email to Minister Morneau. This may work, but the official email for submitting comments to the consultation is
[email protected] .

While many commenters disagree with Garth’s views on the new tax proposal, I think we are all happy he’s brought the government’s initiative to our attention. Thank you Garth!

#215 Tazi Bnu on 08.31.17 at 2:09 pm

#18 Willy H on 08.30.17 at 6:07 pm
The middle class is dying because of:
>wage stagnation
>under-employment
>automation
>skills mismatch with good jobs

—-This is happening because goods demanded by the economy are being supplied by less and less labor, automation may make this worse. Therefore, less demand for labor. Also there’s more and more people around the world supplying more labor. Making it more competitive. It’s simple supply and demand.

>career log-jams as Boomers stay in their upper mgt positions well past 65.

—-What would you want to do about this? They are human beings and have the right to stay in their employment as long as they’re able to perform or choose to retire.

>the marriage of couples in the same economic strata which concentrates increasing amounts of wealth in among fewer families

—-Again what is it that you want to do about this? You seem to be against freedom. People have the right to choose who they marry.

>cost of post-secondary education

—-What about it? There are many degrees that confer no employable skill and don’t increase wealth, but are worthy for their educational pursuits alone, if you have the wealth to. It’s the choice of the student.

>health insurance costs (particularly the USA)

—-The discussion is about policy and attitudes of policy in Canada, not the USA. The fastest growing part of healthcare cost in Ontario, I think, is administration. This would show that the problem is in inefficiencies of the government specific policies. Other single payer systems in the world seem to be much cheaper to run. We should stop congratulating ourselves for having a system than the USA, that’s a very low bar to overcome. It’s like coming second last and being proud that your not last, without any thought on how to do things better. Also, the Dalton/Wynne Government brought in the regressive Health Premium/Tax.

“This is impacting public policy and taxation because we have no other choice. Unless, of course, we want to delight in watching our society and community descend (in slow motion) into a northern version of Rio de Janeiro.”

—-Slippery slope and “either or” fallacy. There are many holes and leaps in that conclusion.

“This is why there was so much blow-back against increasing the TFSA annual contribution levels a few years ago. In theory TFSA’s were structured to benefit all but in reality this has not panned out.

TFSA’s are a gift to Canadians and I am lucky enough to be able take advantage of this gift. Many are not so lucky.

The vast majority of lower middle class and working poor cannot save for their children’s post-secondary education let alone their retirement.”

—- The “blow-back” was manufactured class-ism, using the same political levers and ignorance that Trump also used just as a reference. TFSAs benefit far more people than RRSPs do, especially at the poor end of the spectrum. There are many FI bloggers that have done the math to show it’s possible for any full time worker to retire, if they have the know-how and planning abilities. Go ask one for help, many take joy in doing the number crunching, and they do it for free of all things. However, they all assume, just like Garth, a diversified, balanced growth rate of 6-7%. Maybe there’s something to that number, but luck has nothing to do with it. Saving money and living below your means takes hard work and planning, to overcome the many obstacles, luck has very little to do with it. TFSAs are not a gift. Receiving your own money back from the government is not a gift. Government is a necessary burden for civilizations to exist. They are not benevolent gift givers, for they have nothing of their own to give. It’s like the bully in the yard let’s you keep half your sandwich instead of the whole thing and you have to be grateful, lest they take the remainder.

#216 Howard on 08.31.17 at 2:26 pm

#189 Mike in Toronto on 08.31.17 at 10:39 am
#154 Howard

It was not a “Global Economic Boom”, I don’t think anyone said that.

Oil revenue steadily increased under Cretien, they peaked under Harper. Canada is a resource economy and oil was mostly ~$100/barrel throughout Harper’s term.

Harper slashed spending during this boom period, lifted environmental controls and utterly abjectly and horribly failed to diversify the economy, instead pumping more oil and spiking more housing.

His successors, regardless of their political party, have a mess to clean up. Literally and figuratively.

———————————-

I’m almost certain you don’t have a single fact or figure to back up a word you typed. Low-information voters never do.

This idea that Harper had a laser focus on energy is but a figment of your imagination. The energy sector’s percentage of GDP declined between 2006 and 2014 (even before prices crashed), while overall GDP rose aside from the mid-2008 to mid-2009 period and a handful of bad quarters in the years following.

Before voting for a guy with the IQ of a turnip because you like his hair, trying reading something.

#217 FLHTK on 08.31.17 at 2:33 pm

#184 Grey Dog
Yes I hear you. Restaurants and such are a strain on the pocket book. We try to cook as much as possible at home. Bbq mostly year round.
The problem with a financial advisor is they will invest your money till it’s all gone! Then what?
The only one I would trust is Garth and his team but I think he only deals with people who have 100k plus to invest and I’m not quite there yet.

#218 AGuyInVancouver on 08.31.17 at 2:47 pm

#123 Randy on 08.30.17 at 10:15 pm
Imagine a world with Small Government and low taxes
_____

Imagine Somalia. A veritable heaven on earth.

#219 re., harold on 08.31.17 at 2:56 pm

#56 – Damifino
That’s the blackmail we taxpayers face when Docs don’t get their salary hikes and now corporation tax shelters; We will be left writhing on the floor when we turn up at emergency rooms or Docs offices!
Who else uses words like thrombosed haemorrhoid ?
……..

gotta admit, that’s damn funny

#220 Victor V on 08.31.17 at 2:58 pm

Terence Corcoran: The crushing ‘fairness’ of government tax grabs is finally sparking revolt

http://business.financialpost.com/opinion/terence-corcoran-the-crushing-fairness-of-government-tax-grabs-is-finally-sparking-revolt

#221 crowdedelevatorfartz on 08.31.17 at 3:01 pm

Geez, after viewing the generational sniping.

Has their ever been a Survivor TV show with Boomers vs Millenials?

#222 NoName on 08.31.17 at 3:08 pm

#175 Smoking Man on 08.31.17 at 9:04 am
Forget 1/4 spike in rates in Canada.
I’m calling 1/2 % spike in rates.
GDP 4.5 percent on quarter in the three months to June of 2017
https://tradingeconomics.com/canada/gdp-growth-annualized

—–

tick tock

https://www.timeanddate.com/countdown/to?iso=20170906T10&p0=188&msg=I%E2%80%99m+calling+1%2F2+%25+spike+in+rates.&font=serif

#223 Happy Housing Crash Everyone! on 08.31.17 at 3:22 pm

Interest rates are going Uppa UP UP. Housing prices crashing down down down. I hear maxed out speculators on the verge of losing everything. That’s what happens when you believe a shyster realtor

#224 Grey Dog on 08.31.17 at 3:38 pm

193. Sandy Tyson
I absolutely LOVE non registered account, it can be turned into cash on a year, more money is needed above and beyond normal consumption wants and needs, ie, unexpected Reno, or car dying before our planned date, (we drive our cars into the ground.)

#225 Damifino on 08.31.17 at 3:41 pm

#219 re., harold

Who else uses words like thrombosed haemorrhoid? gotta admit, that’s damn funny
——————————

Funny until you have one. Two types of a-hole enter a doctor’s office, literal and figurative. The poor MD has to deal with both. Us common folk need only tolerate the latter.

#226 Geez on 08.31.17 at 3:44 pm

#221 crowdedelevatorfartz on 08.31.17 at 3:01 pm

Geez, after viewing the generational sniping.

Has their ever been a Survivor TV show with Boomers vs Millenials?

Morons crave for distractions like that.

#227 Geez on 08.31.17 at 4:06 pm

While you are fighting over some shiny bones with no meat, remember that Peter Thiel invested $500,000 in Facebook back in 2004 as the company’s first big investor. In 2012 he sold most of it for $1 billion. That’s a return of 200,000% in eight years… Anything else is the rest.

#228 Leo Trollstoy on 08.31.17 at 4:08 pm

#179 Victor V on 08.31.17 at 9:30 am
Canada’s economy grows 4.5% in second quarter

http://www.bnn.ca/canada-s-economy-grows-4-5-in-second-quarter-1.843803

CANADA is BOOOMING

USA is BOOOMING

DEFLATION is NOWHERE

Just like I called it…

#229 X on 08.31.17 at 4:09 pm

Wow, just read that the original Liberal promise when running for the election was to actually reduce business taxes about 2%…..so much for that.

#230 Grey Dog on 08.31.17 at 4:21 pm

217. FLHTK
Try laying out your case for Garth in detail…if you can prove you are an exceptional saver….

I also BBQ year round with an eye on the weather to avoid rain and snow. Crockpot is a wonderful invention too. Especially now that we are delivering meals to Mothers and a friend with health issues.

We did catch a break in life…at age 57 2009, husband was given golden handshake,while fussing about what to do with settlement, we REALLY LOOKED AT WHAT HAD BEEN SAVED…Yes a tidy sum, and probably a good Canadian average savings, but husband loved what he had been trained for and luckily slid into a job, new company, that was right up his alley.

In the meantime, we lived on his pension, and basically banked a good portion of his new income. Cause that is the basic income we would have had to live on had he retired in 2009! Compounding monthly for a few decent years…a good thing…

By being a blog Dog, reading this sight and consciously saving, avoiding updating all the etoys out there, you will do well.

#231 Victor V on 08.31.17 at 4:22 pm

http://www.canadianbusiness.com/economy/canadas-overachieving-gdp-numbers-imply-further-interest-rate-hikes/

There is good reason to wonder about Canada’s economy strength over the medium term, but 4.5 percent growth is 4.5 percent growth. Within a couple of hours of the release, some on Bay Street were shifting their predictions of when the Bank of Canada will next raise interest rates to next month (the scheduled date for any changes is Sept. 6) from October. The central bank cares mostly about inflation. In July, it said the economy was on track to exceed its non-inflationary speed limit by the end of year. But with the economy growing so much faster than projected, policy makers may well feel compelled to advance their plans to raise interest rates in order to keep up.

#232 Casey V on 08.31.17 at 5:36 pm

Garth maybe turn the comments sections off on Fridays. Take a break. Spreading good financial advise in these times is next to impossible

#233 Nut on 08.31.17 at 5:52 pm

I worked for a small business in the 70’s. The owner was rarely there as the supervisor handled virtually everything. Then one day all us staff got a raise – 20% raise. The supervisor told me privately that the owner forgot to lock his file cabinet in the office, and she spent a weekend reading his tax returns. He was paying his wife a fulltime salary eventhough she didn’t work there and no one had ever even met her. The staff did all the work atributed to her. Plus he had a broken down car on the business property and it was on his tax returns as tranposrtation for business use. the car wouldn’t even run. Lots of other stuff like that. According to the supervisor she confronted him and made him get rid of the car, give everyone a raise, and stop paying his wife a salary…
My wage went from 500 a month to 600. I was living in a To rooming house, and wearing clothes from thrift stores..After the raise I could finally afford to buy some new shirts.

On a different note, Garth is right about a lot of stuff. Stop going to restaruants, take a bag lunch to wherever. Apparently, disposable is way up from the ’60’s and ’70’s. Where does it go? fast food and coffee shops is my guess. Way back when, nobody whet to restaurants all the time.

#234 geez on 08.31.17 at 7:40 pm

Funny until you have one. Two types of a-hole enter a doctor’s office, literal and figurative. The poor MD has to deal with both. Us common folk need only tolerate the latter.
……….

just like anyone in customer service. Stop

i’m a health practitioner. Don’t need a pedestal

#235 FLHTK on 09.01.17 at 12:25 am

#230 Grey Dog
Yes I hope so, i contribute more to my OMERS pension in an AVC account on top of what my pension will be when i retire (additional voluntary contributions) OMERS had a net 10.3 % return last year and i just started a tfsa for our daughter who’s 2 months, I want her to be a millionaire by the time she retires! Although it cannot be in her name i’m doing it now and will transfer it to her by the time she’s 18 so she will have a great head start in life! I also invest in other things as well., rrsp’s because i owe for first time home buyer and such.
I bbq year round rain or snow, thats the beauty of natural gas….I doubt i’ll be given a golden handshake unless the gov, cuts jobs in my field which i doubt because what i do is a specialty and needs certain licenses and legislated from the MOECC, my job will be around for hundreds of years! So i’ll just keep on plugging away and saving!

#236 David Duval on 09.01.17 at 2:56 am

A $12.70 increase in the spot gold price is a “shrug?” Since when?

#237 AGuyInVancouver on 09.01.17 at 4:07 pm

Dave D on 08.30.17 at 5:15 pm
Looks like we will be stuck with that idiot Trudeau in power for the rest of his natural life. Not enough ‘small business owners’ getting screwed by his new taxes to vote him out.
_ _ _
Yeah, 4.5% growth this past quarter, who the hell does “Turdo” think he is? We’re going to hell in a handbag I tell ya…LOL.