The overlords

It’s a dinner I’ll never forget.

As a gesture of thanks, three days after the election in which I was punted as an MP and cabinet minister, I asked the dozen senior staff in my office at Revenue Canada out for a meal. Nice restaurant overlooking the Rideau Canal. So long.

I sat and reflected on my path ahead. No job. No pension. No prospects. A house in the wrong city. No fortune. No offers. No security. No severance. Across from me, merrily munching on a Salisbury, sat the deputy minister. When I am pounding on doors in Toronto, looking for a break, I thought, he’ll still be here. Guaranteed job, government-paid car and driver, big bucks, long vacations, group benefits and a lifetime defined-benefit pension plan, indexed.

The contrast was stark, and dark. On one side the politician – elected on public whimsy, drenched in risk – and on the other the bureaucrat – paid richly by the public, yet strangely unaccountable.

This may help explain our current circumstances. There’s a huge overlord class of public sector workers in Canada. More than 3.5 million people, or 24% of the working population. For them, risk is foreign, benefits are assured, salaries are guaranteed, with the security of a life-long string of monthly payments after they retire. In comparison, two million plumbers, lawyers, farmers, doctors and hair salon owners have no wage security, no pensions and no paid holidays. Bureaucrats in the Department of Finance have been calling them tax cheats and loophole-abusers lately because the government wants to increase taxes, but not decrease spending.

Federal civil servant pensions cost a lot. The average retirement pay-out for a federal worker is $1.2 million after 35 years on the job. The current shortfall (called the unfunded liability) is $4.5 billion. So Ottawa has to find about $415 million in additional revenue every year for the next 14 years to meet its obligations to retiring workers. By whacking small business owners (who have no pensions) as the government is proposing, an estimated $250 million will be realized.

My former deputy minister, who made a very large salary, did not need to save for retirement. He knew he’d receive a monthly payment based on the five best (highest-paid) years of his career, as well as retain the benefits of the public service health plan. No need to worry about market conditions or fluctuating RRSP and TFSA assets, since all future payments were legislated and funded by the taxpayers. The car and driver he enjoyed daily were not taxable benefits, either. Nor did he ever have to stand for election and throw his fate into the hands of the deplorable masses.

Public workers with DB pensions can also split that income with a spouse as a mechanism to reduce the overall tax bill in retirement. If that constitutes their only income, it’s not hard to split it down to the 20% range – while private sector people cashing in RRSPs may face bills twice as steep. Ironically, the T2 gang are about to strip drywallers, family doctors and haulage contractors of the same benefit, even though none have guaranteed pensions.

In one week the short period of time the government allowed for debate on these major tax changes will be over. Small businesses retaining earnings to tide them over the lean years or to fund a retirement will face a tax rate of up to 73%. And while unrelated men and women who start companies can share income in the form of dividends, if they get married it’s called ‘income sprinkling’ and becomes illegal. Entrepreneurs and medical people who played by every rule in the book, living frugally so they could save for retirement within their corps, are now pilloried and demonized by the very crew who wrote the rules.

Are there some people who hide behind incorporations and manage to shelter money the government desperately needs to pay pensions of federal workers? You bet. But there may be better places to get it than whacking all the folks who, collectively, create half the jobs in Canada. Making the federal pension plan fairer would be a start. Or even taxing the windfall and unearned capital gains on residential real estate.

Most of the people about to be squished by Mr. Morneau are not, like him, 1%ers. Most have no job security, no paid time off, no maternity leave, no benefits, and they sure don’t have access to money for life.

Yes, let’s make the system fairer for the middle class. Now you know how.

373 comments ↓

#1 Bob Dog on 09.25.17 at 7:03 pm

Vancouver developer pre-sells condos for “cheaper than in Canada” in Hong Kong, boasts of “pricing ordinary Canadians out of the housing market”

https://thinkpol.ca/2017/09/23/vancouver-developer-pre-sells-condos-for-cheaper-than-in-canada-at-hong-kong-fair-and-boasts-of-pricing-ordinary-canadians-out-of-the-housing-market/

How can anyone view the government of canada as anything other than a fully entrenched terrorist organization.

Its time to get back on EI and enjoy a little reverse income tax. Much better to take money from a shite government than to give money to a shite government.

#2 Ian on 09.25.17 at 7:03 pm

New poll by Forum shows The Blues leading!

The good times are quickly coming to a close for the brainless Snowboarder and his multi-coloured socks!!!

He can take his hatred of small Canadian business, love of Castro, love of gender-neutral pronouns / attempt to turn boys into girls / male feminism, ridicule / contempt of electoral reform, speeches to UN that no one wants to hear, love of everyone-is-lovely-and wonderful, carbon tax on the Prairies, and go back to his daddy’s trust fund that *just coincidentally* wasn’t hit by his murder-Canadian-business tax plan!

Glory hail victory THE BLUES!!!

M48ON – UltraBlue!

#3 JoinTheCRA on 09.25.17 at 7:05 pm

A friend of mine is a CRA auditor. They just started there a year ago after leaving public accounting. They make $90K a year, leave their work at the door when they leave at 4 PM, and have a defined benefit pension plan. They even get every second Friday off because they “work” an extra hour a day (8:30-4:30 is an extra hour). It’s hilarious.

Why should anyone work for any employer other than the government?

#4 Soviet Capitalist on 09.25.17 at 7:09 pm

Together with these change we need to rename the country to ‘Democratic Republic of Canada’ and the title of our PM to ‘Dear Prime Minister’ in order to better reflect the level of intellectual thinking permeating the area.

#5 Susan on 09.25.17 at 7:11 pm

As a newly retired civil servant I can tell you that we haven’t always had it this good. As a nurse, I earned 30% less than a nurse in a general hospital, until Mr. Harris kicked us out and made us part of the Broader Public Sector. As of 2017, if you retire, your benefits are no longer 100% unless you take a package that is more like the package for those on ODSP or welfare. But compared to the changes that Trudeau is proposing, I understand why those getting screwed are upset. Love the picture! It made my jaws sore from laughing so hard. Thanks Garth!
PS. My mother is thrilled with all of the money she is now saving since buying her condo. “What a great investment!!!” She does not include the money she has lost from cashing in her retirement funds or the sudden drop of value.

#6 AK on 09.25.17 at 7:12 pm

I think the general population would be more content if there was a solution which worked for everybody. I agree incorporated individuals need some sort of break for all the risk they take on, but that break currently appears to be unfair as it’s perceived as “these people can do this, but we can’t”.

It’s difficult when some incorporated individuals ARE extremely wealthy and can still split income with their spouse when they definitely don’t need to. If there was a way to base income splitting on the success of the incorporated individual, there might be less backlash. Until then, people will just see rich people getting away with tax avoidance.

#7 trexx on 09.25.17 at 7:14 pm

So we wage fiscal war against the public servants?
Some would say that Fed and Provincial Governments are waging war against small business owners and the private sector in general at present.
What to do?
My sympathies lie with the private sector as it now stands.

#8 tbone on 09.25.17 at 7:15 pm

not fair

#9 Robert Daisley on 09.25.17 at 7:16 pm

The “Employees” category has some serious issues. Many employees can’t get a 40-hour works week because the corporation they work for doesn’t want to pay them benefits. Which brings us to benefits…friend of a friend just died of pneumonia because he didn’t want to miss work to see a doctor – no paid time off, no sick days. And pensions? C’mon Garth, you know that even if an employee is lucky enough to have a pension, it is far from guaranteed. Just ask the folks at Sears…

#10 Deano on 09.25.17 at 7:17 pm

Garth, if you remember anything from your political days, I would assume you know people are far more likely to tear something down rather than build something up. Many who read this post will be decrying the city sewer worker, Education Assistant or Police Officer his or her compensation, few will be saying “let’s make sure our small business owners get a fair crack”. I don’t think your post will have the effect that you were hoping to achieve.

#11 kommykim on 09.25.17 at 7:17 pm

Well, considering that the government in the 1990’s raided 28 Billion from public servants, the RCMP and the military pension plans, your argument rings hollow about the shortfall.

https://beta.theglobeandmail.com/news/national/public-service-employees-not-entitled-to-28-billion-pension-repayment-court-rules/article6554298/?ref=http://www.theglobeandmail.com&

#12 Stone on 09.25.17 at 7:17 pm

Garth, I think many employees will scoff that you show them working 40 hours a week. That’s not reality. Fear of job loss and reprisals from employers makes the worker class employee sheeple work many more hours than that. 50-60 hours or more a week would seem more the norm. One of my co-workers works 12 hours a day, 7 days a week. He only gets paid 37.5 hours. When most people don’t have enough saved to last them beyond 2 weeks or a month, don’t be naive to believe that fear doesn’t drive employees into working ludicrous hours. Fools they are but don’t make anyone believe that being an employee in the private sector is a walk in the park.

#13 cd on 09.25.17 at 7:22 pm

There are some wrong and missing items on your table.

1. I believe that civil servants work 37.5 hours not 40

2. A lot of employees get paid for 40 but are expected to work extra hours.

3. Missing a field for education. A lot of independent workers have to invest a lot of energy/time into education. While some civil servants can get pretty far with a bachelor’s in english (hey there JT)

#14 Terry on 09.25.17 at 7:22 pm

Liberals messing around with tax changes. As I’ve said before ……………… Liberalism is best described as a disease and the only cure is Conservatism! Roughly 66 percent of Canadians voted for someone else or didn’t bother to vote at all in the last Federal election. Canada is slowly being destroyed …………….. a slow motion train wreck. It was a good run but now the end is coming fast.

#15 MaryBea on 09.25.17 at 7:22 pm

I’m an employee and also do not enjoy all the things you seem to think all employees get. No paid sick time, no pension (other than CPP), no guaranteed slalry, no benefits. So, please, stop saying that employees have it so good while employers only suffer. None of my co-workers get any of the benefits of which you speak, and as a matter of fact, after an informal survey of the entire jobsite, non of the other trades on site do either.
You must be talking about government employees, as opposed to private sector.

#16 FOUR FINGERS WATSON on 09.25.17 at 7:22 pm

So why do we keep on electing liars and a**holes who promise to change things but only end up making things worse ?

#17 crossbordershopper on 09.25.17 at 7:22 pm

well written garth, that is why it might happen that many people just quit. The immigrants can waste their time working hard thinking they work for themselves when in reality they work for the goverment, which in terms works for the natives, the unemployeed, the pensioners, the lazy, the disabled etc.
they come with a suitcase full of cash, lied here to come, who would want to come if told the truth, that you will leave your degrees in your closet, and your suitcase of cash here. Canada is simply a big black hole of peoples money, never changes.
If you are truely an entrepreneur, save yourself the time and trouble and simply go the USA. You can talk all you want about freedom and health care, that means nothing, when you make 2-3 times as much in us dollars and are taxed less, at that rate, the price of anything, houses, gas, electricity, mean very little relatively.
GO south young man.

#18 Gavin on 09.25.17 at 7:22 pm

32 hour work weeks for civil servants sound more realistic

#19 young & foolish on 09.25.17 at 7:24 pm

Runaway deficits will almost guarantee that government will not be able to honour all those entitlements. Same in the US and Europe. Something has to give, and it probably will before the boomers die off.

Today they are after small business, tomorrow it will be civil servants.

#20 Zeemak on 09.25.17 at 7:26 pm

Now that you explain it this way, I get it!
Seriously, are they really going to hose the small business crowd for some tax money and cheap votes?

#21 JERRY on 09.25.17 at 7:26 pm

Garth , Trudeau is a disaster for Canada , for small business owners for the Oil and Natural Gas sector ( a Millionaire by birth ) . Trudeau’s background is a Drama teacher ( what a disaster for Canada )

#22 Blessed Canadian Millenial on 09.25.17 at 7:26 pm

As a blessed Canadian millennial, I must say that the -Eau brothers should start looking at the civil servant and their massive pensions. What, if anything, can be done about it?

#23 Smokey Hot Outside! on 09.25.17 at 7:27 pm

Overpaid SJWs in the public sector are an elite class by itself….It’s a policy in a certain school board in Ontario (infamously known for their stance on nudity laws), that if one of their teachers from the LGBT affiliation strips nude in front of minor students on school property, the school board can order the local police department to NOT CONDUCT an investigation.
If an average citizen tries to even walk in underwear in public, they can be arrested for public indecency.

#24 Chuck guild on 09.25.17 at 7:28 pm

Another clear message Thanks for sharing it with us. Off topic Wife and just had the adventure of driving the QEW -all your mentions of Audi’s- one passed us with the top down smiling. Could not help but laugh.

#25 n1tro on 09.25.17 at 7:30 pm

Where’s SCM to whine about government workers not paying their fair share?

Crickets.

#26 Damifino on 09.25.17 at 7:31 pm

#2 Ian

The good times are quickly coming to a close for the brainless Snowboarder and his multi-coloured socks!!!
——————————–

If only it was true.

#27 Retief on 09.25.17 at 7:32 pm

Many civil servants actually pay 50% of their Defined Benefit Pension Plans. As long as you don’t mind 11% of your gross pay taken away right off the top. With this payment it does not leave much room for RRSPs. Not that you need as much.
For last 15+ years most civil servants have lost benefits, had no raises or raises less than inflation and have been falling behind. Most civil servants do not make the big bucks of a deputy minister. I would guess most are under $50,000 a year. They do all the dirty work many highly paid workers won’t do. Collect your garbage, clean up the streets, provide social services to all walks of life, provide roads, transit, hospitals, etc.
They also have to put up with the elected officials who don’t have a clue and come and go with each election with their own version of how things should work.
If you want to have a decent life with good benefits and decent pension, become a civil servant (if you can get in and stay in – there is a high turnover as they don’t want permanent staff anymore). If you want to excel and make a wonderful life with high pay, do something else. You can make much more pay with a useful education and/or a trade/profession. Or start a business.

I don’t really agree with the new tax grab or any new taxes for that matter (don’t get me started). I really think the government should focus on being leaner and more efficient and get out of everyone’s lives. Provide the basic and stop turning us into a welfare state.

My first post. Been following for a few months now. Interesting blog subjects and some comments. There are some good commentators and then there are the others. Yes, I’m a civil servant, but I won’t be getting most of my retirement income from a DBPP. I’ve saved and invested all of my working years (33+) and most of my income will be coming from my investments. Topped up by CPP, OAS and DBPP.

#28 ih the humanity and outrage on 09.25.17 at 7:32 pm

Can’t wait to read all those posts about getting the lazy public workers, with drivers and big fat pensions.

Wait, the SCMs of the world don’t care about what’s really fair. They just care about envy.

Out of curiosity – how much does each Canadian tax payer have to fork over to provide for a $ 1.2 million public pension?

How about each business owner gets that amount tax totally free?

That sounds fair.

#29 Sylar on 09.25.17 at 7:32 pm

Love the chart Garth. Better than any dissertation on the issue that I’ve read from the Finance Dept.

#30 TS on 09.25.17 at 7:33 pm

Garth,

Any young government worker who believes his DB pension and benefits are untouchable and guaranteed to last unt they’re 90 years old is a fool

My wife and are Ottawa government class and we sock away 20,000 away a year because of our lack of faith in our pensions.

You’re overselling pensions as well.

Mine is 2% per year up to 70% minus CPP and the monthly payments are horrendous for both me and my employer.

Its a terrible

#31 I'm stupid on 09.25.17 at 7:33 pm

I have a lot of family in Ottawa. There are two groups, the ones that work for govt and the ones who don’t. One group lives like royalty while the other starves. The irony is that both groups hate unions. Hahaha

#32 rainclouds on 09.25.17 at 7:33 pm

Doubt this resonates with the coddled 25%ers. We plebes wouldn’t understand the sacrifices they make on our behalf. Phoenix, Harper overhang. Answering the phone. Enough to make you sick….

https://www.google.ca/amp/www.macleans.ca/economy/economicanalysis/public-sector-workers-took-a-record-number-of-sick-days-last-year/amp/

You know the world is completely upside down when managers are unionized. The Inmates are running the asylum.

If trust fund boy and his finance bro had the best interests of the country they would cut expenditures . Unfortunately there is a class war to be fought with our money and future.

Disgusting lack of leadership

#33 Damifino on 09.25.17 at 7:35 pm

#10 Deano

I don’t think your post will have the effect that you were hoping to achieve.
———————————–

If the intent was to make me weep, it succeeded.

#34 Retief on 09.25.17 at 7:38 pm

Also, yo uhave to put in a lot of years to get a decent pension. You only get 2% per year of service. And for us that is only from age 55 to 65. Then it is 1.375% per year.

So if you started at age 20 and worked 35 years, you would get 70% of your best 5 in a row for the next 10 years. Then at 65 you would get 48% after that. And we pay in to get half of that.

Also, it is nice to be able to walk out the door after a day’s work and leave it all behind and focus on our real lives/families. But that is not true of all positions.

#35 Marigold on 09.25.17 at 7:38 pm

Thank-you, Garth, for clearing away some of the BS to reveal the actual situation. Even though I do not fall in the left column of your chart (and so these changes wouldn’t directly affect me), it is not right to increase the tax burden there. Can I share this post in my email to T2?

#36 I'm stupid on 09.25.17 at 7:39 pm

On another note, I saw your old boss Stephen Harper in New York this weekend. How many wish he won the election instead of Mimbo Trudeau!

#37 n1tro on 09.25.17 at 7:39 pm

Garth,

You forgot a few other days that gov’t workers get.

1. Paid time off to take your family to doctors. This is on top of sick days
2. Moving days.
3. All holidays including Good Friday and Easter Monday

I miss working at the federal government. :(

#38 bubu on 09.25.17 at 7:40 pm

Hahaha.. 40h work week for the employees ? pension paid by the employer? group benefits? Try again Garth…..

#39 young & foolish on 09.25.17 at 7:40 pm

Common sense dictates that cash-strapped overlords will adjust the tax code and go after wherever the greatest concentration of money is stashed.

#40 Canadian Moose on 09.25.17 at 7:41 pm

The public sector at all three levels of government have it way to good in this country. Politicians included with their gold plated pensions. That would be a good area to start to saving money and reducing expenses as opposed to tax another segment of our economy. Such a no brainer…! Yeesh

Oh and good evening from the Hinterland. Such a beautiful fall day today!

#41 Raj on 09.25.17 at 7:41 pm

DELETED

#42 Canaussie on 09.25.17 at 7:42 pm

Excellent comments. I’ve been wondering why more hasn’t been made of the situation of small business people with no guarantees vs public servants, teachers, police, fire fighters etc with their DBPs, health insurance for life etc (all heavily subsidized by the public purse).

I spent 18 years (mostly self employed) in small town Ontario where the average household income was quite low. Beyond a very small handful of business people, doctors made the most. Right behind them were teachers (often with both spouses teaching). Then came police and various kinds of provincial employees. Joe Public brought up the rear.

I confess that I voted for the federal Liberals. Basically an anti Harper reflex. I’ve been extremely disappointed as I’ve watched Trudeau turn into a red Harper with fancy socks. Shafting hard working self employed people and ignoring the imbalance between public and private workers is the last straw.

#43 bubu on 09.25.17 at 7:45 pm

Salary guaranteed for the employees? Ok, Monday is your last day.. ups…..

#44 Sue on 09.25.17 at 7:46 pm

Wow. Looks like there is lots of places to work on “fairness”
Great article by macleans. Seems mr Morneau doesnt like being questioned about why his corporation and Trudeaus trust isnt being affected by these changes. He actually asked the speaker to have the question revoked. Hahahaha going to backfire on them.

http://www.macleans.ca/politics/ottawa/the-problem-with-trudeaus-high-road/

#45 Sandy McPherson on 09.25.17 at 7:47 pm

Your facts for the greater number of civil service employees are incorrect. Deputy ministers certainly may have the perks you mention but it is idiotic to compare such privilege to the rank and file.

The less-exalted employee does not have a high salary (often it is up to 405% lower than private industry), job security, or a car and driver. Several family members are federal government employees and they are on a defined-contribution pension plan. The lifetime security is a thing of the distant past and as government mandates change, programs are cut and government employees laid off.

As for the health plans that carry into retirement, these cost a monthly fee, just like everyone else has to pay, all through their working life as well as retirement.

If you think the retirement pension is so golden, maybe you better canvas the laid-off and retired people. Many have had to find other employment to make ends meet. This is often unsuccessful because when you’re laid off at 55 years old, the ageism in hiring is rampant.

I’m really disappointed that you write so cavalierly about DM and other very senior positions without any balance. The misleading constructs does no one any favours.

#46 Gentle ,Loving Kindness on 09.25.17 at 7:49 pm

All Canadians are equal, but Liberal bureaucrats are more equal.

#47 Stone on 09.25.17 at 7:49 pm

To add to my earlier comment above, the lack of security in the private sector and seeing how my fellow co-workers have been and continue to be treated made me make sure I shovelled my pennies away and invest them. Everyone knew that tomorrow could be the day that they got walked out the door. It did make me wealthy and I’ll be soon at the stage where it won’t matter anymore as I’ll get to choose to move on to the next stage in my life and not have it be the employer’s choice. I would have loved to do the same though without all the stress that the private sector seems to creates. A little less cruelty and a bit more empathy would go a long way to make the world overall a better place.

#48 Sandy McPherson on 09.25.17 at 7:49 pm

Typo, “often it is up to 405% lower than private industry” should read “…40% lower …”
(e.g. my cousin is a technician at AAFC and moved to BASF with a starting salary that reflected a 60% increase).

#49 The Great Gazoo on 09.25.17 at 7:50 pm

This post really resonated with me. I grew up in a small business household and understand the meaning of risk as my Father’s firm went bankrupt. Tons of stress for the entire family for many years and then to see him (and us) lose it all – very painful. The story gets worse…

This impacted me deeply – the feeling of never knowing where the next dollar would come from. So much so even though, I have always had a desire to run my own business, I felt a deep need for the security of a stable income – so pursued a career in a large corporation.

Your table shows guaranteed salary for employees, but it is anything but. Countless colleagues of mine have been tossed aside after 10-20 years of hard work, late nights and weekends – having to rebuild their careers.

And quite frankly the defined benefits or defined contribution pension plans where I work are not so great (but it is surely better than nothing) – so my former colleagues and I will need to continue working long after government workers are enjoying a generous and guaranteed government pension.

If we really want fairness in this country, this is a critical area that needs to change. Government pensions across the board (Fed, Prov and Municipal) all need to be more aligned with those in the private sector – they shouldn’t be orders of magnitude better.

I don’t expect any change in this area from Trudeau and Morneau, and unfortunately don’t think the new conservative leader is a strong enough communicator to convince the public this needs to change. This of course applies to provincial and municipal leaders.

Little by little in blogs like this will hopefully help people understand what is going on – so we can collectively search for solutions that are fairer for all Canadians.

Garth, you are making a positive difference. Thanks!

#50 nic on 09.25.17 at 7:51 pm

Being an employee doesnt bring any of those benifits. Time that large companies stop hording all the profits and ceos taking 20x regular employee wages. Sad state of affairs we are in. Small business should not be attacked but neither civil servents..police, nurses etc deserve every penny they get..and the benefits.

#51 common sense on 09.25.17 at 7:52 pm

As a former FED employee (3 years) who left to become self employed (25 years), I traded off security for a “life”.

Now I am back to being an “employee”, working just enough yearly to cover expenses as luckily I am debt free with sufficient savings….no way I will pay excessive taxes to the govt.

We all have a choice to play the tax game as set by the govt….how will you play it?

#52 Pete on 09.25.17 at 7:53 pm

Private sector employees are treated like dirt. They are slaves for the employer. No tax breaks for the slaves.

#53 Tofu Scramble du Jour on 09.25.17 at 7:53 pm

“And while unrelated men and women who start companies can share income in the form of dividends, if they get married it’s called ‘income sprinkling’ and becomes illegal.” -Garth

Will we see heavy sweep of divorces only for financial reasons now and then incorporations coming back to life? Then when Scheer gets elected and changes the rules back, everyone gets married again!

#54 Cecil Henry on 09.25.17 at 7:53 pm

3.5 million public sector workers??

24% of all workers? This is obscene

This is just like a communist state bureaucracy!!!!

I thought it was 300,000.

This must end, the public sector must be drastically reduced. Let people consent and choose whether they pay for your ‘services’.

Make it an election promise: ‘We’ll stop stealing your money and redistributing it. Its YOUR money first’

1. Stop this ‘income tax’ theft on higher earning Canadians and reduce taxes to a flat tax. People EARN the money they get in a free society.

2. INCREASE the TFSA to $50,000/ year contribution limit. (Like it is in Britain for example) Stop double taxation of my earnings.

3. REDUCE government expenditure permanently by 20% over 4 years. That’s 5% per year. Then directly reduce income taxes proportionally. REDUCE ALL income tax by 20% by 2020.

Where the productive man dreams of the things he might create if only left alone by his fellows, the ‘Progressive’ dreams of the world he could create if only the lives and property of his fellows were at his disposal.

#55 Ian on 09.25.17 at 7:54 pm

Don’t worry about that 24% figure Garth!

Patrick Brown will apply fix #1 in May 2018, and Mr Scheer will apply fix #2 in October 2019!

M48ON – UltraBlue!

#56 Pete on 09.25.17 at 7:54 pm

#36 I’m stupid
Harper like most CONs are evil monsters.

#57 Willy H on 09.25.17 at 7:55 pm

Oddly enough I had been thinking about today’s topic contrasting government workers with small business since your blog raised this issue weeks ago.

Both government worker DB pensions (& post-retirement benefits) and small business incorporation for tax avoidance are sides of the very same coin. A double-headed coin at that.

Both are completely disconnected from any benefits available to your average wage earning private sector worker.

The problem with using government workers pension’s to justify small business tax avoidance leaves a mass of private sector workers burdened with the bulk of the taxation load. These are the same pensionless folks whose wages have stagnated for two decades.

Funny enough my oldest child is currently in their 1st year at University of Waterloo. Currently students are busy applying for their co-op jobs. There are 5 to 10 times as many applications for government postings vs private sector postings! Very telling indeed.

It only confirms what I have (sarcastically) posted in the past:

Only fools work in the private sector below senior management levels. All the money and post-retirement benefits are to be found almost solely in the public sector. [sarcasm off]

Needless to say I will encourage my children to either become entrepreneurs or find public service work.

#58 Linda on 09.25.17 at 7:56 pm

Questions: first, are there 3.5 million Federal public servants or are there 3.5 million public employees in total (all federal, provincial & civic levels of government). Second, are you claiming all 3.5 million will receive $1.2 million in pension benefits (if paid into for 35 years) or is this number reserved for a percentage of public employees only? Third, can you clarify whether all public employee pensions at whatever level are taxpayer funded or is it only the federal level that is taxpayer funded? By this I mean that should the pension plan fall into deficit/default that taxpayer is responsible for funding it. I am a member of a public plan at the civic level; we are currently paying additional sums (which we had to get permission from CRA to do) in order to fund our current pension deficit. Whatever the rules may be at the federal level, at the civic level I can definitely state that pension is being deducted off my take home pay – any employer paid deductions are shown separately.

As for the amount I will receive upon retirement, I will have paid into my pension plan for 35 years this calendar year. Under the current rules that is the maximum an employee is allowed to pay into the plan. Once I retire, any eventual pension will be calculated upon the 5 highest consecutive years of salary – for most employees, the final 5 years of employment prior to retirement. I don’t know about other employees, but if I retired at age 60 it would take 34 years before I received a gross – not net – sum of $1.2 million based on what my pension plan’s pension estimator says I’d get for a pension benefit. While it is possible I’ll live to age 94, I’m not going to be counting on it as average life expectancy is roughly 80 for men & 84 for women right now. So my next question would be, how likely is it that all those public servants will 1) work long enough to qualify for 35 years of pensionable service & 2) will live long enough to collect $1.2 million? Based on what I’ve observed at various service awards ceremonies over the years, the number of public employees who are collecting 30, 35 or more years of service pins are a tiny percentage of the total. Most employees retire before then.

#59 GB on 09.25.17 at 7:57 pm

One sided Garth….you conveniently leave out important information.

You make it appear as though pensions are free. They are not of course. A worker earning 60K per year is dumping around 500$ per month into the pension plan (for example)

And yes…yes the employer contributes handsomely as well but you made it appear that pensions do not require any “savings” on the part of the employee.

Not true at all.

I have a buddy who works for Home Depot. He has an RRSP plan matched $ for $ plus a yearly bonus (sometimes quite large) if the store meets it’s targets.

There are good and bad benefits with all types of employment.

And let me ask you this….since physicians seem to topic de jour here….if the PS is such a great go then why are physicians so hard to recruit to the PS? Could it be that they do markedly better financially on their own?

#60 Bruce on 09.25.17 at 7:57 pm

I agree with your points whole heartedly, but as a salaried employee in a high tech company, did want to note that comparisons with civil servants is wider than it shows.

While paid work is 40 hours/week, you won’t get very far if that is all you do. Getting a promotion requires min 45-50 hrs/wk. As for pension, in many industries it is a partial match into group RRSPs (our company is a 50% match to a max of $6K/yr). Job security is of course better than a small biz owner, but many companies lay off hundreds or thousands in the down years.

Let’s be clear – snivel servants are in a class all their own.

#61 blessedbypotato on 09.25.17 at 7:59 pm

add to your list on the side of plumbulbs:
getting profit for the taking risk
income sprinkling to family without any contribution
pay dividends to avoid personal TAX
invest in corporation for retirement again avoiding tax
their kids gets maximum RESP grants from govt. as their income appears low
their kids gets free education under new ontario provision
their kids gets learning bond from govt. of canada due to low income
get maximum OAS due to low income
they use roads paid by employees taxes
they use hospitals paid by employee taxes
they enjoy policing and other govt. services paid by employe taxes
they keep tax theft money to enjoy audis and SUVs

its true there are many good reasons to start business, avoiding personal tax should not be one of them.

#62 Willy H on 09.25.17 at 8:01 pm

Government workers don’t just benefit from cash-for-life pensions.

Don’t want to raise hard working private sector folks blood pressure, but it gets worse.

They often retire in their low to mid 50’s and take on employment raking in their government pensions alongside a good salary.

#63 Fran Deck Jr. on 09.25.17 at 8:03 pm

And don’t forget about the severance pay for civil servants … most collective agreements provide at least six months severance at retirement and sometimes unused sick days or annual leave are added to the benefit which can usually be rolled directly into an RRSP without being taxed … and then there are those who earn an unreduced pension and then lose their jobs through a redundancy … that’s like winning the lottery … those unionized civil servants leave their jobs with indexed defined benefit pensions for life along with a couple of years salary which is rolled into their RRSP … because public sector employees don’t save for retirement … they don’t have to … get your 85 or 90 and then become a pain in the ass … tell them you’re never going to retire and they’ll make your position redundant … it’s not complicated and it’s a lot easier than selling your house

#64 Lawyered on 09.25.17 at 8:04 pm

Big song and dance, Garth, but at the end of the day this is about entrepreneurs paying less tax than the rest of us. That is the simple issue here. Why should some people be able to split their income with spouses/children, have a virtually unlimited RSP equivalent account to retain earnings, etc by virtue of the fact that they started a company. What you seem to be saying is that we need to incentivize entrepreneurs to encourage them to go out on their own.. so they should pay less tax than everyone else. Apparently it’s not enough of an incentive for them to have virtually unlimited income potential, not to have to deal with a boss, have flexibility in the hours that they work, etc.

If I make 200k per year and my neighbour makes the same, why should I pay $70k in tax and she pay $50k? Ridiculous. If an entrepreneur can’t hack it without the tax breaks, maybe they shouldn’t be working for themselves.

#65 Victor V on 09.25.17 at 8:07 pm

“Few will profit more from Morneau’s tax changes than MorneauShepell (his biz).They set up pensions to avoid the proposed tax on passive income.” – Tim Cesnick, Tax Expert

https://twitter.com/timcestnick/status/912114107553320963

#66 Two-thirds on 09.25.17 at 8:07 pm

For those who as a matter of cannon refer to Norway’s “so much better than Canada’s” narrative, here is something from The Economist:

https://www.economist.com/news/europe/21728996-letting-populists-join-governments-can-be-good-way-defang-them-norways-centre-right-coalition

Socialist Norway just re-elected a right/conservative government, defeating a left/socialist party that campaigned on a multi-billion tax hike “to redress inequality and shore up government finances” in contrast to the finance minister’s “business-friendly tax cuts.”

The kicker: the socialist party got its second-worst electoral result in 93 years, while the centre-right government whose economic reforms include “cutting corporate and wealth taxes” got re-elected, the first time a “right-wing leader” has done so since the 1980s.

So, for those who habitually insist that Canada should be more like Norway (the real, not romanticized one), I say:

ABSOLUTELY!

#67 Millennial905er on 09.25.17 at 8:08 pm

I’m a provincial employee. I’ve worked closely with ministers, both the elected and unelected kind. I can tell you with absolute certainly that the unelected ones keep the gears of government going, and are virtually always more capable (often by orders of magnitude) than their political counterparts. Have you met Saad Rafi? Dude’s an extraterrestrial super genius. Deputy ministers are the safeguards of government, work hard and deserve to be compensated well.

I know you’re trying to rabble rouse, but let’s be real, they don’t just hire Joe Public for these roles. The chart/table is hilariously reductive. More responsibility = more work hours. You’d have a hard time finding a director level government worker who clocks a 40 hour work week. Meanwhile, lots of incorporated individuals reap benefits public sector workers couldn’t dream of enjoying : they can make their own hours, drop off and pick up their kids at school, take days off at their leisure, outsource their work, etc. There are advantages to every career path. Too bad that can’t be slotted cleanly in your little chart.

#68 BS on 09.25.17 at 8:08 pm

By whacking small business owners (who have no pensions) as the government is proposing, an estimated $250 million will be realized.

Tax increases like this rarely bring in more revenue. You can get away with it on working salaried people because they have little choice. They must work a set schedule and their earnings are taxed at source. Business owners have too much flexibility. They make their own hours and ultimately decide how much to claim as income. My bet is this brings in less net tax revenue. Marxists never learn.

#69 Entrepreneur on 09.25.17 at 8:09 pm

I remember back in the 70’s the public sector was making about the same as the private sector and to make the news that was a big deal. Now, look at the public sector, kings and queens.

Liberal/Conservative, one is the same as the other. Time to break the the bully pals up.

Definition of a small business by the Liberals and the Conservative in Canada: Working slaves that pay taxes but worth nothing more. They need to set up business online and sell internationally. Forget borders and the people in it.

#70 Ian on 09.25.17 at 8:09 pm

#32 rainclouds

Thank heaven you mentioned the Phoenix pay system!! I can’t believe I forgot to mention that.

http://www.cbc.ca/news/canada/ottawa/phoenix-pay-update-may-24-1.4129049

I own a Canadian small business that does project management. I’m not sure who was running the Phoenix project, but I’m going to speculate that if I overbilled by 400 MILLION, more than the ORIGINAL COST, I likely wouldn’t have any clients.

It’s ok though. It’s only our tax money.

M48ON – UltraBlue!

#71 Doug t on 09.25.17 at 8:11 pm

why any government position gets a pension nowadays is beyond reason – these fools need a reality check – throw them out into the real world to fend for themselves

RATM

#72 Thirtysomething Sense on 09.25.17 at 8:12 pm

Really appreciate the perspective shared in this post.

The hypocrisy it’s highlighting of bureaucratic entitlement vs. the upcoming tax shakedown of job and wealth creators has me furious.
But it’s a perspective I didn’t have before so I’m glad I read this.

#73 @careeraftschool on 09.25.17 at 8:13 pm

I worked for both the provincial government and the private sector. What I noticed was other than general labour rates, the government paid less than the private sector in most positions. Something to consider if you plan on working for 30 years.

Most supervisor/management positions at mid size firms in the private sector will generally pay around $70k a year. There is profit sharing and if it’s a publicly traded company like CN Rail or Royal Bank they also have share purchase plans. Ask someone who worked at Canadian Tire over years how they did with the stock. I know a few Starbucks managers that did very financially just because they were issued stock when they started and they didn’t sell.

One thing to remember when picking on union employees, every collective agreement requires two sets of signatures: one from the union and one from management reps. It’s a negotiated agreement for a set period of time so no point crying about it. Negotiate a better agreement next time.

#74 john on 09.25.17 at 8:13 pm

I have little sympathy for tax dodgers in this day and age when the average Canadian struggles to make ends meet.It appears to me the only people protesting are the one who have been screwing the average Canadian for years…..so suck it up and pay your dues :-)

#75 Matt on 09.25.17 at 8:14 pm

Worst part is liberals will get re-elected. Particularly in Ontario. If 24% of workforce is government add their spouse that’s 48% working voters. Only 50% of population goes to vote.

#76 Bob on 09.25.17 at 8:19 pm

What an unbelievable situation we now have in Canada what with our “overlord” class.

How did it ever come to this?

The answer might make an interesting blog entry one day…

#77 AGuyInVancouver on 09.25.17 at 8:20 pm

Garth, one question you don’t answer is: was the Deputy Minister worth it? Was his knowledge and work worth the salary and benefits or not? Would his background have earned him more in the private sector?

#78 Bdog on 09.25.17 at 8:20 pm

Misleading dog whistle post. Comparing public sector workers to deputy ministers is a strawman argument. As others have said, the workers pay equal amounts into the DB pensions. This should happen in more workplaces, not less!

#79 FOUR FINGERS WATSON on 09.25.17 at 8:20 pm

My brother retired from the Canada Post after 30 years. He had “banked his paid sick days” for 30 years so he “cashed them out” and paid cash for a brand new Mustang. Nice car ! What are you driving ?

#80 Willy H on 09.25.17 at 8:20 pm

Know of one situation where a specialist police officer’s salary increased 35%+ over a 4 year period prior to retirement. This officer was “promoted” to slightly higher positions with a larger salary bumping up the average salary over the final 5 years from which the DB pension would be calculated.

This police officer will earn as much in retirement as they did as a salaried officer 5-6 years from retirement! Around $70K per year DB pension.

#81 Entrepreneur on 09.25.17 at 8:21 pm

And the Conservatives that the would reduce the pension it elected. Matter of fact the increased their pensions.

#82 Mark on 09.25.17 at 8:21 pm

Elected politicians have the power to stand up and say, “enough”. It is scandalous that many Deputy Ministers actually out-earn their politically elected Ministers, and sometimes by quite a considerable margin if you include the value of pension benefits.

Any Deputy Minister job that was legitimately advertised and open for competition in a good faith fashion would have literally thousands of applicants. If anything, basic labour market principles would have Deputy Ministers and many senior government positions at relatively minimal pay.

Seriously, who’s in charge of this country? The people who have to face the voters every few years at the ballot box, and are ultimately accountable to them? Or faceless civil servants in Ottawa who may have never set foot on a farm in Melville, Saskatchewan, yet have the power to make life-changing decisions?

#83 ej on 09.25.17 at 8:22 pm

Federalis also can take a 5 year break from their jobs and the gov has to hold those jobs for them. Talk about astounding security (plus paid sick days…). Hey, how can we elect someone to go after snival servants instead of hardworking stiffs????

#84 TEMPLE on 09.25.17 at 8:23 pm

Nice dog whistle again, Garth. Good job pretending public servants don’t pay a huge amount of their salary into their own pensions. And also good job pretending that the people who work for the public service aren’t being underpaid compared to the same job in the private sector, or who are doing jobs the private sector can’t even provide. My job? I make 25% (yes, one quarter) what my private sector counterparts make. I’m so lucky.

I wish you would stop lying.

TEMPLE

#85 Vicky on 09.25.17 at 8:23 pm

I work for a defined benefit pension plan and I am a contributor to this pension plan as well. The pension plan is not paid by taxpayers. Please remember that when I get my pay cheque, I pay certain percentage of my salary for this pension. Also, my employer pays certain percentage. The money that employee pays and the employer pays are invested and it covers 70% of my define benefit pension plan. Therefore, please don’t tell me that this is all taxpayers paying for it because I personally paying for DBP. I do not complain, it is good but you have to better understand how defined benefit pension works.

#86 Debtslavecreator on 09.25.17 at 8:27 pm

Mortgage credit is tightening so fast it’s scary
I hate to know what the RE market will be like in March -June 2018
If the FED does in fact begin to shrink the balance sheet we may see a sharp move up in yields and quite possibly a notable increase in mtg rates – 5 year fixed could be at 3.75-4 by late November
These tax changes are a disaster
Billy will profit enormously by selling IPPs and RCA
Eliminate 95% of all credits and deductions , income is income from all sources including cap gains,eliminate income tax for all under 75k with 10 % paid from 75 k – 150k, 15% paid on all above
Then raise HST slowly over a year to 18-19% shared between all 3 levels of govt
All corps pay a 10 % tax above 100 k net profit with a passive investment tax of 10%
Enforcement costs will drop by 30-40% and revenue should increase 30% or more and then we slowly cut government spending by 15-20 %
Why not do a complete overhaul of the tax system Billy ?

#87 david on 09.25.17 at 8:29 pm

You forgot to impose twice the average tax rate for the civil servant. And they also contribute 60% of the DB pension. As a civi, I drive a chrysler crap box and my trades buddies drive 50K pickups. They earn as much gross but much of it goes untaxed and unreported. Try losing a civi job from cuts and finding other work, while my trades buds can tell a builder to F off and will have another job the next day. I may be a suck civi, but the loser trades who built my Mattamy piece of crap house suck a whole lot more with zero accountability. Zilch.

#88 Billy on 09.25.17 at 8:30 pm

the data compared in this table is so cherry picked and ambiguous that it is meaningless.

Is Garth targeting Trump supporters now?

#89 Blacksheep on 09.25.17 at 8:31 pm

People, people…..stop bitching at each other.

This is the REAL loophole shite, that needs to be stopped:

https://beta.theglobeandmail.com/globe-investor/globe-wealth/six-tax-havens-draw-canadas-wealthy/article35329222/?ref=http://www.theglobeandmail.

But hey, why would Bill risk pissing his friends off as the divide and conquer plan, seems to be working quite well.

Man we are suckers.

#90 Tim on 09.25.17 at 8:32 pm

Instead of vilifying government workers because they have a pension, you should be asking why the rest of the work force has had theirs taken away. Erosion of benefits for workers…a race to the bottom

#91 Ray Skunk on 09.25.17 at 8:33 pm

Great post in the steerage section of this G&M article today:
https://beta.theglobeandmail.com/news/politics/tax-changes-to-make-system-fair-not-stifle-business-growth-trudeau/article36390873/

Thought it deserves a wider audience, so here goes:

Justin uses a web of private corporations to avoid paying his fair share of taxes on revenues generated from his family fortune (his term, not mine). Start with 7664699 Canada Inc. (currently in a blind trust), and 176078 Canada Inc. (to protect the assets of Pierre Trudeau). Even better is 9190-0563 Quebec Inc., set up by Justin & his brother to avoid paying their fair share of taxes on the $2,700,000 chalet once owned by Pierre in Saint-Adolphe-d’Howard. The company is listed as “PRODUCTION AND SALE OF HEATING WOOD AND LUMBER.” A fine environmental steward I see…

Gomer Morneau? “… Finance Minister Bill Morneau’s firm Morneau Shepell has several subsidiaries some might call tax shelters in tax havens as reported by Le Journal de Montreal. Morneau Shepell has wholly owned subsidiaries in the US state of Delaware and the Caribbean nation of Bahamas, both of which are well renowned tax havens.” Does not seem as if he is paying his fair share either. Both are hypocrites.

#92 The fourth turning on 09.25.17 at 8:33 pm

A+++ propaganda piece, Garth. Super venomous. I won’t bother deconstructing it, since you know what you did and why you wrote it this way. I’ve never seen such concentrated bile before in my life. Amazing. Targeted. Emotional.

All I have to say is this. How does it feel to be politically powerless Garth? The worm is turning and your class (the 1%, 10%, whatever you want to call it) is slowly losing influence. By the time the worm turns again half a century or more could pass.

So how does it feel?

More confident than you, obviously. — Garth

#93 wallflower on 09.25.17 at 8:34 pm

#13 cd on 09.25.17 at 7:22 pm
There are some wrong and missing items on your table.

1. I believe that civil servants work 37.5 hours not 40
===========

HA HA HA HA you are hilarious!!!

You meant to type
civil servants ‘show up’ 37.5 hours (when they are not on sick leave)

#94 Mean Gene on 09.25.17 at 8:35 pm

The defined pension plan for federal snivel servants is moving quickly to a 50/50 contribution formula… but considering we are tax payers you could argue it’s funded entirely by tax payers.

Some private sector employees receive perks public sector employees don’t receive. Christmas bonus, free parking, discounts on their employers products/services et cetera.

Unionised private sector (railroads) fair pretty well.

So realistictly, you should be comparing unionized and non-union employees and public sector drones.

OAS is also not fully funded, what is the projected liability for that?

#95 Another Deckchair on 09.25.17 at 8:36 pm

Have been in all 3 categories.

Govt; my “severance” was limited to 3 weeks by union. I did leave close to 1 year sick days on table, paid zero dollars. Now, those who joined 35 years ago had different clauses than anyone hired indeterminate over the last 2 decades or so. I don’t know if they are even hiring indeterminate employees anymore, or if most every new hire is under contract??

Private company: Pays really well, if you are good. (I’m good) When I joined Govt, the next week or so I had a possibility come through at Nortel for 2.5x my government salary. Should have taken it! I’d be retired long ago if I had taken it and invested the difference, but I’d signed the govt papers, and…

CCPC: Current employment. Having fun not having a boss, and working the hours I want to work. Pays well, but not quite as good as Nortel would have, but better than government, but without the “benefits”, so I’m likely behind.

In the end – I try to live each and every day, we only have so many days on this earth, and money is not everything, right? RIGHT!

Have fun!

#96 rainclouds on 09.25.17 at 8:37 pm

Since we are piling on

Pension Indexed too

Prediction. More than 400 posts. 75% agree with you

#97 George S on 09.25.17 at 8:38 pm

Pension plans, paid sick leave, maternity leave, benefits of all types are part of the salary paid to people for their service of working at their job. They are used by employers (entrepreneurs, business people, governments of various levels) to attract qualified individuals to their jobs and keep them there. They are not gifts by the employers or entrepreneurs, merely compensation for the job. In the case of the federal public service pensions (which I know about because I have recently retired) they are a condition of employment that you must sign up for and contribute to even if you can get a better deal elsewhere.
Employers, businesses, entrepreneurs and others are free to get (purchase) their own pension plans, sick leave insurance, disability insurance, with the salary that they pay themselves (and apparently every single one of their blood relatives even if they are working for them or not). There are a host of insurance companies that will provide you with all of those benefits for about the same rate as everyone else pays for them. They likely will get a better rate of return on their pension plan contributions (as you continuously claim over and over in this column) if they hire an investment company like yours to do it for them.
Contrary to popular belief every one of the federal public service people that I know that have retired have had at least 300 days of accumulated sick leave that they walked away from. (I had 300 days after 25 years) Not everyone is evil in the public service, just like not everyone in business is evil.
The continuous vilainization (sp?) of the public service by the former conservative government seems to have done its job and the misinformation continues.
BTW, the pension shortfall was 48 billion only a couple of years ago so we are making pretty good headway at balancing things, or was that just more BS from the former conservative government?

#98 Happy Housing Crash Everyone! on 09.25.17 at 8:38 pm

16 FOUR FINGERS WATSON on 09.25.17 at 7:22 pm
So why do we keep on electing liars and a**holes who promise to change things but only end up making things worse ?

______________________________

It’s because we still have SHYSTERS selling RE and everyones rage is focused on this group of evil greedy useless [email protected] who should go the way of travel agents. I wonder how much itravel2000 pays their operators? That’s how much a realtor/SHYSTER is worth.

#99 Long-Time Lurker on 09.25.17 at 8:39 pm

#22 Blessed Canadian Millenial on 09.25.17 at 7:26 pm
As a blessed Canadian millennial, I must say that the -Eau brothers should start looking at the civil servant and their massive pensions. What, if anything, can be done about it?

You’re going overboard. Try to be reasonable. I get it if you’re being sarcastic. A bad attitude is like a handicap. Why am I writing to you?

Here’s something people may not be aware of… A year or two ago I was watching Running Wild with Bear Grylis. His guest celebrity was President Obama. Bear took him to see a glacier in Alaska. On the show (you can check it out yourself) Obama said that “We barely avoided a depression.” When I heard that I was shocked because you can’t get a more authoritive statement than that.

So now that the U.S. Fed is removing their stimulus (QE – money printing) is the U.S. going to go into economic depression? Did they really solve any of their economic-financial problems? Trump could be looking at his economy imploding. He didn’t cause it but he’ll be the fall guy.

Things aren’t too rosy here in Canada either. After the housing bubbles pop, we can at least expect a recession. For ya youngsters that means businesses shutting down and lots of unemployed people. I’m Gen X by the way.

#100 crowdedelevatorfartz on 09.25.17 at 8:40 pm

Yep.
Gotta luv the govt employee, inflation indexed, garanteed for life , no chance of bankruptcy, pension plan.
I used to work for SNC Lavalin for about a year and a half.
ALL the senior management were ex-govt employees that had dealt directly with SNC on the federal Govt contracts.
Upon retirement they immediately walked over to SNC and had a job waiting.
No conflict there.
There should be a minimum 2 year “no hiring policy” for companies that have govt contracts. Too much chance for hanky panky.

Also spoke with a friend who is 7 more years from full retirement for the City of Van. He’ll be 52…full pension $50G’s a year….garanteed for life…..unlike the rest of us non civil servant plebes struggling to stash money away for retirement…..
Welfare is looking better and better.
Can CRA get Blood from a stone.

#101 Smoking Man on 09.25.17 at 8:40 pm

Should have listened to my guidance counselor in High School, “You would make a great garbage man.” Would have a kick-ass Defined Pension now.

Live and learn.

#102 Tax Fairness on 09.25.17 at 8:42 pm

I am salaried with dual Master’s degree and renting. In my friend’s circle, some of them even did not graduate grade 12th are having good bank balances, multiple expensive homes, high-end cars and they are poor (low-income) in the eye of Government. This fraud thing need to be controlled, if they are earning good, should be reported and they should be paying their share, only then we can do the comparison. On one side (salaried), everything is documented, while on the other side, nothing is true (all manipulated and hidden), comparison is not realistic in such case.

You have two Master’s degrees and crafted that comment? Maybe Darwin was right. — Garth

#103 T S on 09.25.17 at 8:44 pm

Will family trusts be exempt from the passive income tax?
Asking for a friend.

#104 Rainman on 09.25.17 at 8:46 pm

You come across a little bitter lately with your posts? this comment I find interesting? “Or even taxing the windfall and unearned capital gains on residential real estate” Why attack RE and something that has always been in place? makes your argument sound hypocritical? I agree it makes no sense to attack small business, but your hate on for RE is sometimes questionable.

If you want houses to be affordable, then inflated capital gains should not be taxless, encouraging unbridled speculation. Seems reasonable to me. — Garth

#105 canali on 09.25.17 at 8:50 pm

i hope we all remember the screwing trudeau and morneau are having on us, come the next election…send mr sunny days on his way.

#106 Proud Civil Servant on 09.25.17 at 8:52 pm

Wow, you really reveal yourself Garth when you double down like this.

It’s rather Trumpian in tone, except you’re not bashing the NFL players, just the public sector to play to your own base.

As for public pensions, I have busted my ass to contribute to mine. Huge deductions every pay cheque, at a salary lower than what I could have gotten in the private sector.

And thanks to neocon dotards from the Mike Harris era, our pension contributions were capped for years when the stock market was doing well (they thought our pensions would get too rich, lol)- now we have to catch up after years of underperformance and our government employer faces a deficit.

Face it – public sector pensions are a much better example of how to have savings invested than most people have experienced with their own gambling on real estate, forex or mutual funds.

Go ahead and keep trying like Trump to rally your base. It’s not working. The new tax measures have enormous support, coats to coast.

#107 Smoking Man on 09.25.17 at 8:54 pm

#98 Tax Fairness on 09.25.17 at 8:42 pm
I am salaried with dual Master’s degree and renting. In my friend’s circle, some of them even did not graduate grade 12th are having good bank balances, multiple expensive homes, high-end cars and they are poor (low-income) in the eye of Government. This fraud thing need to be controlled, if they are earning good, should be reported and they should be paying their share, only then we can do the comparison. On one side (salaried), everything is documented, while on the other side, nothing is true (all manipulated and hidden), comparison is not realistic in such case.

You have two Master’s degrees and crafted that comment? Maybe Darwin was right. — Garth
……

This punk never made an all in bet I’m thinking.
Probably has the entire starbucks menu memorized.
Those progressives.

#108 Lost...but not leased on 09.25.17 at 9:00 pm

To crowded-escalator-flatulence

Re my post on Nukes(bogus?) and Moon Landing(lol?)..

Flat earth proponents serve, at minimum, a use with respect to keeping the synaptic gaps well – tuned….

A contrarian view is based on _____? _____? ……….?

Post 9-11 and 2008 Is the Federal Reserve “federal”?
..I think many have had their skeptic gene tapped and what is this entity called Gov’t all about?

Lots of analysis available that dissects Gov’t visual propoganda of Nukes as a Hollywoodish special effect..
Hiroshima..Nagasaki..and the “bomb”…critical thinkers review the aftermath and say all the evidence suggest firebombing…ie why roads are shown in photos with little debris..and concrete and metal structures relatively intact…classic firebomb attack……..ie a real nuke attack would destroy everything and moreso in a horizontal flattening.

The real kicker would be that if these aforementioned Japanese cities were nuked…they would be radioactive for a long time?…yet quickly rebuilt?

Moon landing….again critical thinking would prove to any 3rd grader it was not possible then nor possible now…

Saw a recent YOUTUBE video re advancements of technology..with respect to those videos we have of “astronauts in space”…..and how weightlessness and other illusions can created with “masking” programs that can edit in certain things and edit out things that contribute to the illusion.

#109 cry me a river on 09.25.17 at 9:01 pm

inc claiming car payment which they dont use for work, gas ,etc
use of so called home office
double dipping expenses between 2 register inc
claiming home improvements as biz expense
claiming tleisure vacations expenses as company expense
hiring there spouse/kids as employees, without actual work
claiming entertainment expense- buying season tickets then selling on kijiji or stubhub for cash
claiming private parties as a business expense for clients
getting multiply cell lines under company for whole family and claiming as biz expense.
list goes on..on..on

#110 rainclouds on 09.25.17 at 9:01 pm

Perhaps times have changed but:

DC plans were/are restricted in where you can invest. Typically high MER funds (unless it’s changed.) Consequently the return is shite.

DB Pension plans provide a garanteed return.

YUUUGE

#111 fred graves on 09.25.17 at 9:03 pm

Can anyone remember long ago when many smart, progressive people said ” the best thing we can do to bring the public sector up to snuff is to bring their salaries closer to the private sector”? Me thinks they have far overshot that goal – without accompanying improvement-and have, as Garth’s article scathingly points out, have become an elite group unto themselves
Sickening. But free men and women we are, and we did it to ourselves. Perhaps recent Greek history will unfold here to correct this.

#112 Welcome to Slurrey on 09.25.17 at 9:03 pm

For all those complaining its so sweet being a public sector employee……… why not pursue it yourself instead of complaining ………. theres plenty of fields to choose from ……… give it a few years and youll see the benefits of the private sector – better growth and income opportunities , possibly better flexibility and what used to be better tax benefits ?

#113 akashic records on 09.25.17 at 9:05 pm

One can do great both in the private or public sector.
Others can do horribly in both.

Some have more risk tolerance others less.
Some chooses slow and steady, others can stomach roller-coaster ride if the upside can be substantial.
Some don’t mind to sign-in, sign-out and get warning emails for being 5 minutes late, others prefer to make their own schedule.

It is pointless to pit people against each-other.

Everybody is grownup, everybody is making decision for their own life.

The only thing is worth discussing, how can life be better for everyone by increasing the size of the pie, instead of watching the pie shrinking and be stupid enough to focus on how to get a bigger piece of the smaller pie.

#114 Billy on 09.25.17 at 9:06 pm

The grass is always greener on the other side of the fence.

#115 Spectacle on 09.25.17 at 9:06 pm

Re::
85 SWL1976 on 09.24.17 at 1:38 am
#56 Spectacle

Actually it’s 8 things they need to know to survive the next 30 years. Physical, Financial, Psychological.

8). The destructive effects to Canadians and Western Civilization , of Agenda 30 ! Also Agenda21.

The United Nations 2030 Agenda decoded: It’s a blueprint for the global enslavement of humanity under the boot of corporate masters – …

————————-

Good point Spectacle

—- Thanks Scott .

Trust your life choices and the thought you are placing those decisions is aging traction.

I like your web site.

I’m extremely busy, but would like to put something out there, to do something positive to change the damage is see coming from Canadian From Govt leaders.

So many business owners I deal with on a daily basis, have absolutely no idea what was just done to their financial future. Perhaps a series of links that people could share, eg Garths blog, your site with email petitions, an awareness section that explains quickly what Agenda30, what tax corruption is being rammed through, etc?

Thoughts?
Regards

#116 Smoking Man on 09.25.17 at 9:12 pm

Fellow Entrupenurs, when you’re chasing a dream and it’s not there yet. Civil servants have no clue of the fire inside.

When you haven’t quite made it. Put this on the buds. It’s energetic.

https://youtu.be/tAGnKpE4NCI

And when you do make it. Get every last cent out of Canada and watch the usless eat the usless.

#117 Chaddywack on 09.25.17 at 9:17 pm

Garth you were an MP and cabinet minister and in office for many years. Didn’t you have around 7 years service (1988-1993 and 2006-2008) so wouldn’t you receive a public pension too?

If I recall correctly you served at a time when the MP pensions were much more lucrative than they are now.

My pension is $19,000 per annum. I donate it. — Garth

#118 Ponnaps on 09.25.17 at 9:18 pm

Fat obese government.. sunshine list of the peel district school board..

http://www.sunshineliststats.com/Employer/73815/2014

Ridiculous how many superintendents and how much they get paid..

comms director clocking 165K+

and this is for a school board!! … just one of the 76 district boards in Ontario… don’t even bother doing the Math..

#119 45north on 09.25.17 at 9:20 pm

The contrast was stark, and dark. On one side the politician – elected on public whimsy, drenched in risk – and on the other the bureaucrat – paid richly by the public, yet strangely unaccountable.

Shared Services spends $1.4 billion a year. It was created by the senior civil service. The major promise was to save money but it hasn’t and it won’t. Just as bad, it has demoralized the IT divisions of the departments. Such as Revenue Canada and Statistics Canada. Yet the senior civil service remains unaccountable.

By whacking small business owners (who have no pensions) as the government is proposing, an estimated $250 million will be realized.

that’s the first time I’ve heard what the government expects to realize. Really in comparison to government spending it’s not that much. I’m thinking that it won’t get the money because small businesses will cut back their business which means that the government will still need mo money and small business will be badly demoralized. As “Lead Paint” said it’s the rhetoric and positioning of the government that is demoralizing. Damaging to the Canadian economy.

Fredericton: To drive home their concerns, the head of Fredericton’s Chamber of Commerce brought several local small business owners to the news conference.

http://www.cbc.ca/news/canada/new-brunswick/morneau-tax-reform-fredericton-finance-1.4304384

Characterizing the last 45 years of Canadian tax policy as loopholes is insulting to businesses that have worked within the rules in good faith to build their businesses, to save for retirement, and sometimes just to keep their doors open,” said Krista Ross, CEO of the Fredericton Chamber of Commerce.

http://www.ctvnews.ca/politics/canadian-chamber-of-commerce-critical-of-proposed-tax-reforms-by-ottawa-1.3603183

I would cut Shared Services. It wouldn’t be easy and it wouldn’t be cheap. There are a thousand civil servants whose careers depend on it. Much of the senior civil service would resign – with a pension. There are multi-billion dollar contracts with private firms. Still, I would cut Shared Services.

#120 Bezengy on 09.25.17 at 9:22 pm

Only 70 hrs. per week? Really? I was self employed for 20 years and yes I made money, for this I apologize to you lefties. I was my customer’s site by 6 am, and finished by 10 am, and then drove 4 hours to my next customer and worked till 7 PM, and then drove 4 hours home to get some sleep, and then I did it again the next day. On call for 20 years straight 24/7, and I’ve accumulated more community volunteer hours than anyone reading this blog……except maybe Garth. If I told you Garth wakes up without an alarm clock, my guess is you wouldn’t understand.

#121 will on 09.25.17 at 9:22 pm

Gordie Pape wrote today about something called an IPP – Individual Pension Plan – a registered pension plan for a business owner (and incorporated professionals) and family members. Comments Garth?

Ask Morneau Shepell. Here. — Garth

#122 Danny on 09.25.17 at 9:26 pm

Very good chart comparing benefits etc.
However what is lacking are numbers on a life time of earnings…..and a factor for the “cash deals “…..no tax ….for the trade folks you talk about.
Being in the construction business for many years….I know of many electricians and plumbers who own rental multiple homes and their own luxury homes themselves.
Actually also know barbers who came from Europe with grade 3 education levels who also did fairly well…owning multiple homes put in their children’s names when their kids were young.
Perhaps we could get some income statistics on these small business owners to have a better sense of comparison to civil servants. ….for a lifetime comparison before we judge which groups do better considering more income related benefits.
Do agree though that civil servants which includes the education system are well paid…have better job security even if they are not good teachers.
Yes starting a self employed business is risky….but after a number of years and business is thereafter good…should the existing sprinklering of profits continue for the life of the business or be limited to the tough starting years only?

#123 Randy on 09.25.17 at 9:28 pm

And yet we let government workers and these corrupt bureaucrats vote themselves raises every single the election. Why ???

The War in Canada is against the Taxpayer because the CRA and its tax-grabbing tentacles is larger than the Canadian Military.

#124 Herb on 09.25.17 at 9:29 pm

Nice hammering on Conservative wedge issues there, Garth.

May I recommend more light, less heat?

#125 Smoking Man on 09.25.17 at 9:30 pm

To my hetero sexual wife.

https://youtu.be/tAGnKpE4NCI

#126 Howard on 09.25.17 at 9:32 pm

They also need money to hand over to money-losing Quebec parasite corporations:

Andrew Coyne: The odd merger of Bombardier and the Canadian government : http://nationalpost.com/opinion/andrew-coyne-the-odd-merger-of-bombardier-and-the-canadian-government

#127 Smoking Man on 09.25.17 at 9:33 pm

Shit I meant this one on for the last post. Thumbs are a bit uncorrected at the moment.

The wife song. Every freek outside the 416 that Justin hates will like this.

https://youtu.be/NGorjBVag0I

#128 Curtis on 09.25.17 at 9:36 pm

Garth,
Regarding the taxing of capital gains on primary residences, the government has missed out on decades of capital gains tax so far. To institute this tax at peak house, they may get some windfall tax revenues from people who have owned the same property for a long time. But wouldn’t they also be setting people up (mostly the recent buyers) for a decade of offsetting tax losses once the correction takes hold. What will this do to government coffers?

#129 mathman on 09.25.17 at 9:36 pm

What has happened over the years is a perverse inversion of what should be the norm. In the public sector you were paid less than the private sector, had a pension, benefits. Call it a security tax relative to the private sector.

What happened over the years though collective bargaining and innumerate people not understanding granting long term concessions, pension bumps, benefits for life would create billions of $$ in unfunded liabilities.

Now in our new global world, we have our public sector employees leading the charge! Can’t think of a better way for us to be competitive!! We have the most egregiously overpaid police forces in the world (Toronto), government workers who are paid handsomely with gold plated pensions and don’t have a care in the world. The amount of vacation, wellness days, flex days etc etc – friends of mine who work in the public sector are out to lunch thinking this is normal and how you create a competitive country.

You can’t have long term prosperity with the current imbalance, where it is punitive to take risk – and those who actually create jobs are punished.

Math

#130 Bob on 09.25.17 at 9:37 pm

Garth, you lost all credibility.
Civil servants don’t work 40 hours a week.
They work 35 hours.
And in recent years, they were asked to work 37.5, and in return, they get extra day off lieu days, like every other Friday off.

They work 35 hours a week. Not 40. How am I suppose to believe you now Garth? Sheesh.

#131 PBrasseur on 09.25.17 at 9:39 pm

In Québec civil servants enjoy a 35 hours work week, not 40 (that is when they actually show up to work)

#132 jim on 09.25.17 at 9:41 pm

#67

“Deputy ministers are the safeguards of government, work hard and deserve to be compensated well.”

how cute, the marxist labour theory of value.

the people who clean the bathrooms at main and hastings also work hard.. do they deserve the same compensation?

The way to value labour is to ascertain its market price. Government jobs (like deputy ministers) do not have market prices. Hence, unless you are a communist who subscribes to Marx’s idiotic theory of valuation, you are going to have a hard time justifying the salaries of people like this.

(Same goes for CEOs, whose compensation is not set by market forces but rather by a small oligarchy of elite 0.005%ers who sit on multiple boards…. so don’t compare them to CEOs or the like).

#133 mathman on 09.25.17 at 9:46 pm

I may make a multiple or two of the average public sector worker, but when I do the math on the value of their pension, benefits, actual hours worked and time off – in total comp, I probably make less while assuming all kinds of risk. I could be fired tomorrow, and if I am right about where the housing market is going and the knock on effects, I’m pretty confident I will loose my job.

Howard Levitt wrote a piece in the Global a few years ago that was an honest look at total comp as a way to gauge the dispersion between the private and public sectors. The math does not lie.

#134 Winter on 09.25.17 at 9:47 pm

For everyone who thinks that all federal employees have it so great/easy why don’t you go to your nearest recruitment centre and fill in an application? The Canadian Armed Forces is hiring. It is all about choices.

I’m tired of reading all your whiny/poor me comments on this blog. The fact that you are a Canadian citizen makes you extremely fortunate. I believe that a portion of Canadians are extremely selfish and clueless to how a large percentage of people live in this world without even the basics (3 square meals, water, adequate shelter, health care, education, peace, freedom, etc). As you brush your teeth, with clean running water, why don’t you give thanks to all your comforts, that some take for granted, and stop whining about how other Canadians have it better than you. The grass isn’t always greener on the other side.

Canadian soldier (20+ years) and 3 missions overseas to war torn countries. Would you rather be living in one of those countries or residing here with no pension? Suck it up and count your blessings.

#135 jim on 09.25.17 at 9:48 pm

#92 The fourth turning

Beautiful example of modern left wing ‘discourse’.

No argument, no rejoinder, just ad hominems. This is all the left can summon up these days.

Fact of the matter is that states like California and provinces like Ontario are drowning in debt because of underfunded public sector pensions. They are not drowning because of evil right wing politicians or space aliens, but rather rapacious public sector unions who live off tax contributions from a citizenry that lacks the same goodies (e.g., defined benefit pensions).

I believe median salary for teachers surpassed that of lawyers in Ontario a year or two ago. Let that sink in, given that law used to be an elite profession. Now compare the median salary of teachers to that of engineers, software developers, and others…. Canada is turning into France, where the only good jobs are with the government.

#136 Steve on 09.25.17 at 9:50 pm

#102 Tax Fairness on 09.25.17 at 8:42 pm
I am salaried with dual Master’s degree and renting. In my friend’s circle, some of them even did not graduate grade 12th are having good bank balances, multiple expensive homes, high-end cars and they are poor (low-income) in the eye of Government. This fraud thing need to be controlled, if they are earning good, should be reported and they should be paying their share, only then we can do the comparison. On one side (salaried), everything is documented, while on the other side, nothing is true (all manipulated and hidden), comparison is not realistic in such case.

You have two Master’s degrees and crafted that comment? Maybe Darwin was right. — Garth

————-

Ha! ESL maybe? Not all Masters are earned in English.

#137 FOUR FINGERS WATSON on 09.25.17 at 9:53 pm

If you want houses to be affordable, then inflated capital gains should not be taxless, encouraging unbridled speculation. Seems reasonable to me. — Garth
………………………………
Especially if they are foreign speculators:

Foreigners, mainly from China, purchased 25 percent and 16 percent of the new housing supply in New South Wales and Victoria, respectively, in the year through September 2016, according to a Credit Suisse Group AG examination of state tax receipts.
As we’ve discussed frequently over the past several years, home prices in some of Australia’s largest markets have gone completely vertical since 2013 as wealthy Chinese buyers have increasingly sought safe havens outside of the mainland to launder invest their cash. Per the chart below, home prices in Melbourne have more than tripled since 2002 and Sydney is almost as bad.
https://www.bloomberg.com/news/articles/2017-09-21/dear-ghost-home-owner-australia-officials-plan-to-tax-you-mate

#138 Sydneysider on 09.25.17 at 9:53 pm

Mr Turner: what you left out was that getting the boot was the best thing that ever happened to you. Running that store of yours is probably more fun than you ever had in Ottawa.

Personally, I pity those well-grazed farm animals in Ottawa, or those federal employees who sit in little stalls like battery chicken at the Douglas crossing. They have traded away their entire lives in exchange for a level of security that most of us who are not totally idle can easily achieve anyway.

#139 Lee on 09.25.17 at 9:55 pm

#128 Curtis,

Who says government will allow you to write off losses on principal residences? I don’t get a credit if I die in debt yet there are probate taxes if I die with money.

#140 ImGonnaBeSick on 09.25.17 at 9:55 pm

Jealousy abounds. Typical Canadian BS. You’ve got it better than me, unfair. I liked #54 Cecile Henry’s suggestions. Reduce government by privatizing services. Reduce taxes drastically or go to only consumption tax with refund for earnings under a threshold. Increase incentives to save and invest by increasing TFSA limits – call it Tax Free Investment Account like it should have been named.

What we have now is awful. Hope we can get conservatives in Ontario and Alberta and at least stall Socks and Moroneau until they’re gone in 2019. At the very least a minority in ’19.

#141 Howard on 09.25.17 at 9:56 pm

#92 The fourth turning on 09.25.17 at 8:33 pm
A+++ propaganda piece, Garth. Super venomous. I won’t bother deconstructing it, since you know what you did and why you wrote it this way. I’ve never seen such concentrated bile before in my life. Amazing. Targeted. Emotional.

All I have to say is this. How does it feel to be politically powerless Garth? The worm is turning and your class (the 1%, 10%, whatever you want to call it) is slowly losing influence. By the time the worm turns again half a century or more could pass.

So how does it feel?

—————————–

The problem with your gloating is that you don’t realize that the mega-rich will not be impacted by these tax changes and in fact the Eau-bros backed off on a measure that would have done just that : elimination of the stock option deduction.

The Eau-bros inherited all of their wealth. They barely earned a penny that wasn’t handed to them through rich parents or through familial connections providing lucrative, cushy jobs. The proposed tax changes harm those who DID work for their wealth, but not the parasite class represented by the Eau-bros. Doesn’t that make you angry?

#142 Keith on 09.25.17 at 9:57 pm

It’s been quite a time with people across the political spectrum commenting on how good everyone else has it, myself included. Time for some reflection.

The great poet John Donne penned “no man is an island.” All of us commenters got it wrong. From the eat the rich far lefties, to the socialists who want to tax the rich, to the business owners who love the multi year minimum wage freezes we all think that what happens to others doesn’t affect us.

We are all connected, it can be viewed as a zero sum game. What happens to someone else, happens to us. The disconnection of a digital age is upon us, and we think that a dollar out of someone else’s pocket doesn’t hurt us – but it does.

Every tax hit to a small business, every zero percent unionized wage settlement affects everyone. Time for all of us to recognize that we are all in this together, and that is how we will build a better society – not divided, but together.

#143 Penny Henny on 09.25.17 at 9:57 pm

Hey Garth,
your last chart comparing benefits is a bit off.
Salary- guaranteed- correct
Work week- 40 hrs-meh, yes and no. I KNOW SOME OBLIGATED TO DO CLOSE TO 50 HRS PER WEEK WITH NO OPTION FOR OVERTIME (

#144 Penny Henny on 09.25.17 at 10:03 pm

Hey Garth,
your last chart comparing benefits is a bit off.
Salary- guaranteed- correct
Work week- 40 hrs-meh, yes and no. I KNOW SOME OBLIGATED TO DO CLOSE TO 50 HRS PER WEEK WITH NO OPTION FOR OVERTIME (sorry cap lock got stuck)
Group benefits- available but paid for by EMPLOYEE
Mat leave- 1 yr – correct again
Paid sick days- NONE
Paid vacation- you are correct again
Pension-ha, ha, ha very funny – None

you forgot that business owners go into to business TO MAKE MORE MONEY (using my best Kevin O’Leary voice).

please stop whining.

#145 Pete on 09.25.17 at 10:04 pm

I’m all for the government taxing small business but 73% is ridiculous. Closing loophole for doctors is ridiculous. I think government is over exaggerating on how deep and hard they will tax small biz. The government will go half way and everyone feel relieved its not as bad as they thought. Secretly small biz will laugh behide closed doors and the masses are happy something was dont to stop small biz from avoiding taxes.

#146 Howard on 09.25.17 at 10:04 pm

#104 Rainman on 09.25.17 at 8:46 pm
You come across a little bitter lately with your posts? this comment I find interesting? “Or even taxing the windfall and unearned capital gains on residential real estate” Why attack RE and something that has always been in place? makes your argument sound hypocritical? I agree it makes no sense to attack small business, but your hate on for RE is sometimes questionable.

————————————-

If homeowners get tax-free gains on RE sales, then renters should get tax-free gains on an alternative investment of their choosing.

Why shouldn’t the 30% of Canadians who rent be entitled to a little fairness?

#147 Manitoba Whale on 09.25.17 at 10:05 pm

#32 rainclouds on 09.25.17 at 7:33 pm
Doubt this resonates…

https://www.google.ca/amp/www.macleans.ca/economy/economicanalysis/public-sector-workers-took-a-record-number-of-sick-days-last-year/amp/

If trust fund boy and his finance bro had the best interests of the country they would cut expenditures

Disgusting lack of leadership
*****

I did not know that the sick days were reinstated/policy scrapped. The only sick days I have as a business owner is on my own dime or pay someone overtime to fill in.

An estimated $1.30 billion dropped by the Liberals here is much more than the estimated $0.25 billion to be gleaned from incorporated small business.

Did know about sprinkled pensions amongst significant others. I think I will start sprinkling income with my wife once she buys into my Holdco. I never did before but really disappointed in Trudeaus’ government.
‘When in Rome…’

#148 Lost....but not leased on 09.25.17 at 10:05 pm

As mentioned in the previous blog post…Civil servant pensions are the 2nd biggest fiscal liability to Feds after Federal debt..(and that’s just Federal…not Provincial or Local Gov’t.)

I read the earlier posts, and yes..many submit Then vs Now arguments ….ie they “may” not have to same benefit levels as their predecessors. However, the issue is the funding of current liabilities.

How does the Federal Gov’t table legislation that effectively fiscally attacks the PRIVATE sector and all its UNcertainty..when it is clear the PUBLIC sector pension is a fiscal liability to the tune of at least an extra $400 million a year?

I am not even discussing the “circle -the -wagons” whereby if Gov’t or its employees are investigated or taken to court by affected citizens…taxpayers fund the defence as well.

I can submit a number of anecdotes of the various perks civil servants enjoy that few may be aware of. One I find particularly galling are police who retire in early 50’s and then are employed by another public sector entity.

Lets be blunt…where are our taxes directed?..is their value?… and do we have other options?

#149 Doug in London on 09.25.17 at 10:06 pm

The current shortfall (called the unfunded liability) is $4.5 billion. So Ottawa has to find about $415 million in additional revenue every year for the next 14 years to meet its obligations to retiring workers.
—————————————————-
There’s something seriously wrong with this picture. No wonder tax cheaters don’t feel at all guilty. Why doesn’t the benevolent government follow the example of many companies, getting rid of the defined benefit pension and instead having defined contribution or target benefit system?

#150 Mike on 09.25.17 at 10:07 pm

Garth,

With all due respect, which lala land you living saying employees work 40hrs only??

Please. Private sector employees easily put 50-60hrs. Even your 35% public sector has most healthcare employees putting 50-60hrs in there.

Please don’t simplify employees into lucky 40hr bucket.

#151 Long Branch Apprentice on 09.25.17 at 10:09 pm

Illinois is bankrupt, in no small part due to pension fund liabilities.

Give Illinois Bankrupt a Google, unless they’ve censored it.

Coming soon to a province near you.

#152 Lobster Man on 09.25.17 at 10:10 pm

While visiting Australia last November, I was surprised to hear that the majority of civil servants in Australia do not have defined benefit pension plans. Only the very top dogs do. Otherwise, the civil servants are just like the Average Joe, entitled to contribute to the SUPER.

How did they manage to accomplish this?

Can anybody enlighten me as to their “when-and-how?

#153 FACT CHECKED on 09.25.17 at 10:10 pm

Statistics Canada reports:

3.6M public sector jobs (*)
18M jobs in total (†)

That means the public sector is 20%, not 24% of the employment.

But yeah, still large, and plenty of benefits that incorporated individuals do not have.

(*) http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/govt62a-eng.htm

(†) http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/econ40-eng.htm

Looks like your chart includes public servants. Try again. — Garth

#154 John on 09.25.17 at 10:11 pm

I worked in gov office as student and they would tell me not to start work if I showed up at 830 instead of nine then said I couldn’t work lunch if I felt behind on something but had to play cribbage or go for a walk. After that summer job I didn’t want to get a government job. Now I’m older I think I would cherish it. In my opinion government is bloated for workers and isn’t accountable they can go over on a project 300 percent nobody cares. If they were a private industry they would fail badly .. my two cents

#155 Howard on 09.25.17 at 10:12 pm

#112 Welcome to Slurrey on 09.25.17 at 9:03 pm
For all those complaining its so sweet being a public sector employee……… why not pursue it yourself instead of complaining ………. theres plenty of fields to choose from ……… give it a few years and youll see the benefits of the private sector – better growth and income opportunities , possibly better flexibility and what used to be better tax benefits ?

———————————–

Public sector hiring in Canada is rife with nepotism. If you don’t have a family member or close friend in a high enough position, your chances of scoring a public sector job are close to nil unless you have a very specific and rare skill set.

Before moving to Paris, a close friend of my parents offered to get me an “in” with the Ontario civil service. I admit, I seriously considered dropping the whole Europe experience and taking him up on the offer.

#156 crowdedelevatorfartz on 09.25.17 at 10:14 pm

@#46 Gentle Loving Kindness
“All Canadians are equal, but Liberal bureaucrats are more equal….”
++++++

Reminds me of the ultimate arrogant answer from a govt employed hog caught feeding at the trough and questioned publicly about it….

” I’m entitled to my entitlements….”

https://www.google.ca/url?url=https://www.youtube.com/watch%3Fv%3DUIo-bEsoMgA&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwidwf_L48HWAhVil1QKHSlrCdwQtwIIIDAB&usg=AFQjCNEyIWJ1zJ8Mg7IoT6FUfQWviCQcig

#157 Howard on 09.25.17 at 10:16 pm

Thank God for Mike Harris and the Sunshine List otherwise just imagine how much more obscene public sector pay would be in Ontario.

#158 Smoking Man on 09.25.17 at 10:18 pm

Overlords
It’s in my book. When Nictonites make an escape from the flamingo window.

https://www.youtube.com/watch?v=ZluVURB-om0

#159 Long Branch Apprentice on 09.25.17 at 10:19 pm

Oh, Puerto Rico too.

Connecticut, Kentucky and I think California too.

No politician is talking about it. The ultimate taboo.

An honest politician would tell anyone who can, to convert everything to bitcoin, pay off any personal debt if you can, and start thinking that if you do happen to be lucky enough to retire, that it will have to be 100% funded by YOU, the man in the mirror.

Garth, a few articles on SW Ontario farmland would be very much appreciated.

Go Leafs!

#160 eugene_al on 09.25.17 at 10:20 pm

The civil/government workers are the backbone of the country…. You want to see a policeman who will take $75 in cash instead of $150 plus insurance increase… You want to see a nurse who will provide “a better care” for your family member for extra $20 a day… You want to see a municipal worker who will do nothing until you pay a bribe under the table… You want to see your mail correspondence coming open everytime…

You would better look at all those cash jobs around…. I’m afraid that the underground cash economy in Canada is bigger than the real one… A person living in a mention and getting child benefits for his kids became a norm in Canada…

But what is the most important – you cant use the word “corruption” in Canada…. It’s all about the “error of judgement”…. Do we have future?

#161 Manitoba Whale on 09.25.17 at 10:20 pm

Just for the record our private corporation offers an Extended Health Plan to all employees where they pay about a faith of the cost. We also offer employees a flex time workweek/workday that many employees have used to take care of loved ones or to go to their child’s extracurricular or school events. We offer competitive wages for our industry. We are a growing company.

Oh, I almost forgot to add that we are also exploitative tax cheats for having passive investments in our corporation for future investments and for planning our own retirement.

Great leadership.

#162 toronto1 on 09.25.17 at 10:20 pm

Dont fall for this class warfare nonsense:

employee vs business owner

private vs public employee

city vs rural

millennial vs boomer vs gen x

right vs left

its all nonsense- none of it matters at the end of the day- how you live, and enjoy is what matters most.

if you want you capital to be safe do what the trust fund folks do. period. set up blind trust, offshore corporations, pay dividends, and buy dividend paying stock etc..

the game goes something like this— none of the MP’s actually write the bills passed in the commons, most are written by civil servants, SME (subject matter experts) etc.. before these become law they are shared with a few chosen special people and corporations (think of the big accounting-audit-law firms) for potential impact write ups and for some tweaking and feedback.

these are the suits in the same tower as Garth is, they get the skinny before anyone else does and if there is a material impact to their clients- those capital flows get adjusted-moved etc..

just how the game works- follow what the old money does and your capital will be well preserved. (yes the big banks all employee teams of top lawyers and money managers that employee aggressive tax avoidance schemes, so do the household name consulting companies. Their usually on the right side of the bet- but that info costs money to obtain.

I dont mean your average doctor or lawyer or even 1%, follow what the guys at the country club are doing- the established money is doing and you will be fine.

tax fairness this, fairness that etc.. its all political speak to distract you and to rally the vote- think outside the box and the spectrum if you want to prosper.

all this class warfare reminds me of the Montreal Canadians vs Toronto Maple Leaf fued

#163 crowdedelevatorfartz on 09.25.17 at 10:20 pm

@#108 Lost your Mind

Wow!
You vote?
Please tell me you dont reproduce.
God help us.

#164 OttawaMike on 09.25.17 at 10:27 pm

Garth Turner,
At least have the decency to start marking my posts deleted. Just making them disappear like a magician is taking the low road.

You didn’t earn a DELETE with that last one. — Garth

#165 Crimea a river on 09.25.17 at 10:28 pm

For many of the “employees” that your are referring to in the middle column:

The salary: not necessarily guaranteed (layoffs, reduced hours, etc.)

Work week: 40 hrs/week. Right, most professionals in the “employee” situation don’t get paid overtime even though they often put in well over 40hrs/week.

Group benefits: Paid by employer. Not necessarily; in fact usually deducted from your pay.

Retirement pension: Paid by employer. That’s rare now a days; most business don’t provide pensions, this is 2017 not 2002.

This just shows how out of touch from reality and entitled some of the business owners who abuse the system are. They haven’t realized times have changed. Unfortunately for them they can’t bs everyone, as we all who work for an employer know the reality.

#166 Long Branch Apprentice on 09.25.17 at 10:28 pm

Last post I swear.

I thought PM Happy Socks was all about LBQGT rights? How come Chelsea Manning, who is Obama’s making btw, is barred from entry to Canada? How can JT’s Rainbow friendly government permit such an atrocity?

The left is silent on the issue, as usual. Not surprising, they’re so confused over what bathroom to use they don’t know what to protest.

#167 Ian on 09.25.17 at 10:32 pm

Falling house prices from now until the federal election in 2019, AND plenty of time to uncover what Morneau and The Snowboarder have in their offshore private accounts and trust funds while they are asking you and I to pay more!

Sing it with me now…

la-la-la-la-la-la-la, The Blues, The Blues

(note the crescendo coming below)

LA-LA-LA-LA-LA-LA-LA, THE BLUES, THE BLUES!!!

Did The Snowboarder expense all his multicoloured socks to his trust fund?!

M48ON – UltraBlue!

#168 LP on 09.25.17 at 10:33 pm

#10 Deano on 09.25.17 at 7:17 pm
…I don’t think your post will have the effect that you were hoping to achieve.

I agree with you in that statement. If ever anyone wanted to ignite class warfare, this column would fit the bill.

#169 paul on 09.25.17 at 10:33 pm

#149 Doug in London on 09.25.17 at 10:06 pm

The current shortfall (called the unfunded liability) is $4.5 billion. So Ottawa has to find about $415 million in additional revenue every year for the next 14 years to meet its obligations to retiring workers.
—————————————————-
There’s something seriously wrong with this picture. No wonder tax cheaters don’t feel at all guilty. Why doesn’t the benevolent government follow the example of many companies, getting rid of the defined benefit pension and instead having defined contribution or target benefit system?
—————————————————————–
It’s funny how people talk of tax cheaters,It’s the Government cheating us out of OUR hard earned money.
Then piss it away, I get it we need taxes to keep the show going but not so much that if you are not in the wheel you are on your knees,

#170 young & foolish on 09.25.17 at 10:34 pm

“Misleading dog whistle post”

No kidding. But as you’ve noticed, the blog dogs fell for it. Hehe.

Go Garth, go!

#171 Hotdogs from Heaven on 09.25.17 at 10:35 pm

And don’t forget that last year T2 gave all federal public sector workers a 6% raise AND a $600 bonus for signing the raise agreement without a strike.

He did this just days before slapping the rest of us with the new national carbon tax rules.

#172 Popeye the sailor man on 09.25.17 at 10:36 pm

#11 kommykim on 09.25.17 at 7:17 pm
Well, considering that the government in the 1990’s raided 28 Billion from public servants, the RCMP and the military pension plans, your argument rings hollow about the shortfall.

https://beta.theglobeandmail.com/news/national/public-service-employees-not-entitled-to-28-billion-pension-repayment-court-rules/article6554298/?ref=http://www.theglobeandmail.com&

I Agree the shortfall is self inflicted.

ALSO>>>>>>>>>>>>>>>>

By the way the public servant DBP is gained from taking money about 10% or more of income from the pay check over 35-40 years to get that pension.

I have a coworker aft 33 years making 55K will get a pension of about 27K because the bridging amount does not apply. Add CPP and OAS he might get over 40K. Sound like a lot but remember there is NO CASH value! once he passes on his wife will only get 50% DBP until she passes on shortly after in many cases. And when she does there will be no money for there estate.

If someone saved 10%+ of there income in RRSPs and now TFSAs since they started work at age 20 they can have the same kind of income and still have a PRINCIPLE amount in the investments for there estate. Also if you increase your withdrawal rate to end up with a zero balance at age 85 or 90 your can even increase your income even more.

THE DBP is a forced saving plan the Government matches the contributions as part of your pay and benefits. Many blue collar workers in government make blue collar wages and many less than public sector which is fair in some ways because of stability of employment.

Not everyone in government is in upper management, but I agree there maybe a bit to many of them.

My work environment wages;
Oiler or deck hand 49K (12 hr days everyday, shift work at sea away from family for 4 weeks at a time)

Engineer or deck officer 55-70K; same 12hr days shift work for 4 weeks at sea.

Captain or Chief Engineer 85-105K; Same 12 hour days and more. Responsible for 50 to 100 Million+ dollar ship and 15-40 lives.

DBP max (best average five year period) X 1.3%/year for a max of 35 years. (I don’t count the bridge amount of 0.7% because that is not life time and is collected only for a short bit till CPP kicks in)

Very few I know worked from young age to retire with full benefits

SEE LINK BELOW for actual example of payouts see Page 8 and the table outlines the following;
Average monthly pension paid out $1,514
Average retirement age in 2016 61.9

https://www.pspp.ca/about/publications/annual_reports/PSPP_Annual_Report_2016.pdf

So that is about 18K annual income from DBP. That is an average many are getting less and of course many are getting more.

The error Garth makes in today’s blog is it is easy to show the fat cat making 150 K/ year with 35 years from age 20 to 55 having the full DBP of 105K/year for 30 years and point and say that’s not fair. But this example is very rare. and the link to the report for 2016 will show that.

#173 Scrapper on 09.25.17 at 10:42 pm

3.5 public sector workers in Canada!? What’s the breakdown to come to this number?

Also, in your table at the end of the post you describe non public sector employees to have a guaranteed salary, group benefits, paid sick/vacation days, pension etc. Isn’t it becoming less common to have these benefits and job security depends on the success of the business as it would for the business owner?

Agreed with the public sector part of the table eventhough I’m obviously doing it wrong since I work much more than 40hrs/week without overtime.

#174 Hotdogs from Heaven on 09.25.17 at 10:42 pm

Oh and Garth, I work for Canada’s largest I.T. company, CGI. Not only do they not have ANY kind of pension, but when they take a company over the first thing they do is shut down the pension plan. Pensions are only for companies that still have unionized work forces which is a minority of them.

On September 18 CGI laid off 1,600 people in Europe, the U.S. and Canada. They have all been told that they will not get their severance packages unless they spend the next 6 months training their replacements from India. And that 6 months of salary will be subtracted from the severance since it is “working notice” of the layoff. Of the 22 laid off people I personally know, ALL are over 50 years old with vast amounts of knowledge and experience, but NO pension to fall back on.

Just watch. T2 will then give CGI some big government contracts while they help decimate the Canadian middle class.

#175 Bottoms_Up on 09.25.17 at 10:44 pm

Again let’s be accurate. Public servants contribute heftily from each pay cheque into their pension. Someone earning $60k in the private sector earns a substantially larger paycheque than $60k earned in the public sector. There is very good job security, but it’s not 100%. Just ask those laid off in 2013.

#176 TurnerNation on 09.25.17 at 10:48 pm

Join the Party – else your assets will face confiscation. That my grandparents learned.
Same system.

#177 JWD on 09.25.17 at 10:48 pm

Great post once again Garth with some interesting comments.

I have a high school friend that “incorporates” as a CEO of a mining corp on the TSX. He’s always looking for new investors to keep the party going but in reality like most, it’s not viable as a real operational mine. He has no real experience in his role other than being a great salesman. That said, I know he pulls a large salary from the company and has also formed a side company that “consults” for the mining corp. Employs his wife, and writes off every expense possible under the sun with 2 leased high end SUV’s etc. Essentially double dipping with 2 salaries from the same source. Fair? Not at all.

So from #109 – Cry me a river – I agree and see the other side of the argument. However, folks like doctors and other hard working business owners? Of course its not fair, but unfortunately their is too many cheats out there abusing the system. They do need an alternative solution. And I agree on the RE capital gains or at least a graduated tax especially pre sales. You sell within a year? 20% tax on the gain, 2 years? 15%, 3 years? 10%, 5 years? 5% etc.

#178 Smoking Man on 09.25.17 at 10:50 pm

#175 Bottoms_Up on 09.25.17 at 10:44 pm
Again let’s be accurate. Public servants contribute heftily from each pay cheque into their pension. Someone earning $60k in the private sector earns a substantially larger paycheque than $60k earned in the public sector. There is very good job security, but it’s not 100%. Just ask those laid off in 2013.
…..
Its crazy goofs that fund your pay.

Not ANYMORE,

#179 Ian on 09.25.17 at 10:52 pm

#11 kommykim

You move to Venezuela or Cuba, since you’re so enamoured of communism, and the rest of us will fix this country in the next two years. Deal?

#180 paul on 09.25.17 at 10:52 pm

117 Chaddywack on 09.25.17 at 9:17 pm

Garth you were an MP and cabinet minister and in office for many years. Didn’t you have around 7 years service (1988-1993 and 2006-2008) so wouldn’t you receive a public pension too?

If I recall correctly you served at a time when the MP pensions were much more lucrative than they are now.

My pension is $19,000 per annum. I donate it. — Garth
—————————————————————–
Garth now you did it, Everyone one here will says you do that to get a big write off. lol

https://www.youtube.com/watch?v=XEL65gywwHQ

#181 Lost....but not leased on 09.25.17 at 10:53 pm

Re: Ontario Teachers Pension Plan(OTPP)

..apparently founded in 1990…since then pensions funded by investment income(only 21% funded by teachers and employer)
..posted a 13% return in 2015.(Globe and Mail) and a surplus of $13 Billion.

However…ratio of active teachers to pensioners is 1.4 to one…at end of 2015 paid benefits $5.5 Billion vs new contributions of $3.3 Billion.

Hear we have a public sector union pension dependent on private sector investment..wonder how it will be impacted by T2 and Moroneau?

#182 Smoking Man on 09.25.17 at 10:57 pm

Wyett my dog.

https://www.youtube.com/watch?v=9SKFwtgUJHs

#183 jas on 09.25.17 at 11:01 pm

Garth,
Agree. it is shocking to know that public sector workers make up 24% of the working population!!
What the WTF are they doing? I guess you’ve explained here what they are doing (rather doing nothing, but collecting salary now and pensions later).
Hey, voters! Wake up!

#184 Penny Henny on 09.25.17 at 11:01 pm

Garth I would say the comments are 75% against you and 25% for you. Maybe they are getting tired of this argument or more likely they see there is no meat on these bones.

Look where democracy has gotten us lately. — Garth

#185 John in Mtl on 09.25.17 at 11:05 pm

#108 Lost…but not leased on 09.25.17 at 9:00 pm

…Moon landing….again critical thinking would prove to any 3rd grader it was not possible then nor possible now…

Saw a recent YOUTUBE video re advancements of technology..with respect to those videos we have of “astronauts in space”…..and how weightlessness and other illusions can created with “masking” programs that can edit in certain things and edit out things that contribute to the illusion.

You sound like an uneducated Millenial… thinking the world only started when you were born and history is just another boring subject. In the 60’s and particularly in 1969 when the first manned lunar landing occured, they didn’t have green screens and powerful fancy CGI systems!!

#186 Popeye the sailor man on 09.25.17 at 11:06 pm

Cont. from my last post.

If the average DBP payout in 2016 for an age 61 retiree is only $1514/M you can obtain this level of success by saving $117.26/m from age 20 to 61 @ 6% and collect that income for 25 years. ($200/m for “age 20 to 55”)

See you don’t need a gold plated DBP.

Use your TFSA and you might need even less.

#187 Manitoba Whale on 09.25.17 at 11:09 pm

#121 will on 09.25.17 at 9:22 pm
Gordie Pape wrote today about something called an IPP – Individual Pension Plan – a registered pension plan for a business owner (and incorporated professionals) and family members. Comments Garth?

Ask Morneau Shepell. Here. — Garth
*****

Did Bill Morneau not think that people would connect the dots? I can’t think of any political optic fail as bad as this one. I know using a helicopter to go fishing, taking a vacation with a lobbyist or selling a ski lodge are dodgy, but really, this is tough to beat. This is not behavioural, this is a big chunk of the Liberals’ policy.
Really?

#188 Ponzius Pilatus on 09.25.17 at 11:16 pm

Reading the posts, all I get hatred from people toward their fellow human beings.
Garth, you gotta stop stirring the pot.
Let bygones be bygones.

#189 Smartalox on 09.25.17 at 11:21 pm

I don’t understand why people thing that any new government will change things for civil servants. Most of the civil servants, likely including the one that was the subject of Garth’s comparison, were hired or appointed by a Conservative government.

And let’s be clear, while Garth, as a former Revenue minister may have shown some competence in the position, most people who are elected to govern us, run for office because they can’t get hired doing anything else. The Senior civil servants that actually run the ministries are hired for their abilities in their fields of expertise, and unlike in the US, where the decks get cleared with every new administration, they keep our government operations stable, and for the most part, effective.

Contrast this with the US where cabinet secretaries and senior bureaucratic positions get replaced with patronage appointments to wealthy donors. But it’s not like they would have paid for their patronage, right? And how many secretary positions are unfilled by the Trump administration at this point? 100? 200? Who needs a few dozen diplomats when the head of government makes policy decisions via Twitter? Trump’s really accomplished a lot so far, hasn’t he!

I’m an employee. I could have worked in government, but turned down the job in favour of the private sector, where hard work and ability have resulted in my salary increasing over 300% since I started working 19 years ago.

And based on that choice, I’ve played the system to my advantage: I’ve earned RRSP and later, TFSA contribution room, and forwarded that balance year after year until I was making enough money to make use of it. I now pay less in taxes, than I did five years ago, and my retirement portfolio (and income split into my wife’s RRSP, too) are growing, indexed to inflation in the type of 60/40 balanced, diversified and re-balanced strategy advocated by our host.

By the way, my wife worked for a few years as a provincial government employee. She carried a small pension when she left (forced out of a union shop by criminal harassment, where the union steward did nothing to remedy her complaint), but it’s in a dismal Locked-in Retirement Account (LIRA) where it sat in high DSC high MER funds for years, before we got some proper management. It would have sat there longer if she hadn’t left the crown corp.

Ten years she’s been ‘free’ and we can’t use that LIRA money for anything: not for a house down payment like the first time home buyers’ plan, not for continuing education. Not until you retire, unless you die first.

Some ‘pension plan’!

#190 Popeye the sailor man on 09.25.17 at 11:22 pm

#171 Hotdogs from Heaven on 09.25.17 at 10:35 pm
And don’t forget that last year T2 gave all federal public sector workers a 6% raise AND a $600 bonus for signing the raise agreement without a strike.

WOW THAT SOUNDS GOOD Not!

6% raise for a 4 year contract that will expire 8 months from when it is signed because they make it drag out for 3+ years. That is only 1.5%/year.

My Agreement expired in March of 2014 so we have not got a raise since then, and the best offer they can come up with is 1.25%/year for 2014-2018. So in the last 8 years I have seen only a about 6% Total growth in wages. How much has the cost of housing, gas, food, insurance ect gone up in 8 years? Any signing bonus barely covers any lost opportunity costs of not having the cash in hand for the last 4 years. See how long you would put up with not getting your tax return for 4 years after you file.

#191 Popeye the sailor man on 09.25.17 at 11:30 pm

#128 Curtis on 09.25.17 at 9:36 pm
Garth,
Regarding the taxing of capital gains on primary residences, the government has missed out on decades of capital gains tax so far. To institute this tax at peak house, they may get some windfall tax revenues from people who have owned the same property for a long time. But wouldn’t they also be setting people up (mostly the recent buyers) for a decade of offsetting tax losses once the correction takes hold. What will this do to government coffers?

YES YES YES !!!!!!!!!!!!!!

I have thought of the same thing, and it really worry’s me that they might do this!

Fools if they do they will give a huge gift to the greater fools that have bought at peak house.

EVERYONE write in to stop this on this reason alone if the T2 government considers this.

#192 DON on 09.25.17 at 11:39 pm

#99 Long-Time Lurker on 09.25.17 at 8:39 pm

“…Things aren’t too rosy here in Canada either. After the housing bubbles pop, we can at least expect a recession. For ya youngsters that means businesses shutting down and lots of unemployed people. I’m Gen X by the way.”

8888888888888888888888 BALL

Take note Millens – Gen X was launched into a recession right after the last housing bubbles burst across the country. ($250K included a new big house with a pool).

Things can change fast and they will!

#193 Mark on 09.25.17 at 11:39 pm

“My job? I make 25% (yes, one quarter) what my private sector counterparts make.”

So why aren’t you in the private sector, a sector which obviously values your labour and your contribution far more greatly to society than the public sector? Unfortunately a lot of public servants really over-value themselves and their position in the labour market. Paying top dollar 20 years of “experience” doing the same things over and over 20 times does not represent good value for the taxpayer, nor does the possession of irrelevant qualifications which often are good for a few pay increments.

The public sector should be an “employer of last resort”. A sort of employer that doesn’t pay much, but will hire the people who don’t want to be, or can’t be part of the private sector.

Having public “servants” as being the kings and queens in society is completely and utterly unacceptable. Not only that, but democracy itself is routinely subverted by having public servants essentially writing legislation and being so influential over members of government that elected politicians are in constant fear of the reaction of the public service. Ontario, for instance, the outrageous salaries paid to many public servants could only be justified through subtle and not-so-subtle forms of extortion.

#194 MF on 09.25.17 at 11:42 pm

I can’t stand this fake “war” between the private and public sectors.

Good friend works at the cra. They just closed a call centre in downtown Toronto and laid off all their contract workers (about 80% of the place) and she is out of the job.

She made 45k an hour and had zero stability.

Please tell her “how good she has it” again.

MF

Contract workers aren’t employees. — Garth

#195 DON on 09.25.17 at 11:43 pm

@45north

Agree get rid of Shared Service – it was the latest and greatest centralized service delivery. It is the new public admin model and ends up failing in each and every case. Usually staffed by eager political friendlies as contracts are large. Not many managers have competencies in IT, but yet they make important decisions – hence the usual cost over runs and failures. Sometimes it is good to be a consultant.

#196 Mark on 09.25.17 at 11:45 pm

“The Senior civil servants that actually run the ministries are hired for their abilities in their fields of expertise”

Actually its been my experience that the public service fiercely tries to maintain a “closed society”, with very little opportunity for mobility between the public and the private sectors. Its not just the forced official bilingualism at the more senior levels keeps a lot of good talent out from the private sector, but its rigged job descriptions that arbitrarily require experience that could only be gained in the public sector. Its hiring panels, by and of civil servants, which are focused on a lot of metrics which are not exactly indicators of success in the private sector. Its basically a fairy tail that the public service is getting the best and the brightest at the senior levels because most at the senior levels in the non-politicially appointed public service have never worked a meaningful amount of time in a true private sector job.

In addition salaries and hiring policies being structured so that the public sector is “the employer of last resort”, I’d totally be in favour of a lifetime 15 year service limit, only extendible by the Governor-in-Council upon special application, for any federal public servant. This would clear out the dinosaurs, limit exposure of the Crown to severance costs, and provide for a dynamic public service where people are routinely joining from the private sector, or alternatively, leaving for the private sector.

#197 Blacksheep on 09.25.17 at 11:47 pm

The Fourth Turning.

Based on your handle, where do you believe we are in the Gen timeline / cycle?

#198 conan on 09.25.17 at 11:47 pm

Truth be told, they could slash salaries and benefits by 30 % in the Public Service, and there would still be 1000 resumes on file for each position on file.

I live in Ottawa. We laugh at Public Servants who still cling to the notion, that they are treated badly compared to private industry.

#199 donald on 09.25.17 at 11:47 pm

It’s not that unusual to have a public service in the low 20’s percentage-wise (see here: https://en.wikipedia.org/wiki/List_of_countries_by_public_sector).

We are in line with most developed G7 nations with the exception of the US (we can march id you wish to give up healthcare).

This is really all about the decisions we make about our careers. I work in the public service, wife in private. She works far harder than I do, but wasn’t able to find a path the same as I would. 25 years ago, I was considered crazy to join gov’t as that was not where you made your fortunes. Times have changed, as the world has, for the worse for private sector workers post-2000

#200 Dosouth on 09.25.17 at 11:50 pm

I thought last week you had finished with this? But you still didn’t answer my question. ..are u incorporated? You talk about full disclosure…just sayin’….

Financial advisors are not allowed incorporations, with all compensation taxed as income. Care to compare T4s? — Garth

#201 Ben on 09.25.17 at 11:51 pm

The vast majority of public servants are not highly paid, they don’t make the “big bucks.” Most of us make modest incomes and work very hard at jobs that keep our society running smoothly. Most of our pensions are far from cushy, they do provide some income, but are not truely guaranteed (my employeer has changed our pension plan three times in the organizations history that I’m aware of, only once retroactively affecting employees, and solvency of pension plans is always a concern. Smart public servants don’t count on their pensions being the same in 20 years as they are now and save accordingly). My “cushy” government pension plan is forcing me to save extra for retirement, which is fine, but people should realize a pension isn’t a golden ticket. You seem to have a disdain for public servants, and in this case you built a straw man to support your position based on the salary and benefits of one highly paid public servant.

Meanwhile, you seem to have unending sympathy for doctors and Lawyers. While I appreciate what these proffesional do, I have no sympathy for their financial situations. Recently you featured a letter from a dentist on your blog. My wife has a high paying job in the dental field, and so I’ve known a lot of dentists over the years. All have owned houses anyone would be envious of, the vast majority have vacation properties, and the most modest vehicle I’ve ever seen one own was valued in excess of $60,000, with many owning exotic cars worth far more. MD’s also don’t get my sympathy. While I think we don’t structure our payment system well, every doctor I know makes a very nice living, taking in far more money than any of the public servants I know.

I do agree that many of these proposed tax changes are bad ideas which treat some modest income earners as a vilified “1%” not to mention the consultation period is far too short; but I’m left confused by your apparent disdain for public servants and your love of doctors, dentists and Lawyers, who are not going hungry because of any tax changes. They might have to buy a porche instead of a lambo next year, but they’ll survive.

#202 Lost..but not leased on 09.25.17 at 11:57 pm

#185 John in Mtl

yeesh….You just don’ t get it.

#203 n1tro on 09.26.17 at 12:06 am

#84 TEMPLE on 09.25.17 at 8:23 pm
Nice dog whistle again, Garth. Good job pretending public servants don’t pay a huge amount of their salary into their own pensions. And also good job pretending that the people who work for the public service aren’t being underpaid compared to the same job in the private sector, or who are doing jobs the private sector can’t even provide. My job? I make 25% (yes, one quarter) what my private sector counterparts make. I’m so lucky.

I wish you would stop lying.

TEMPLE
________________________
Your point is moot if you dont say what job you are doing. Are you an accountant and make 25% less than some in the big 4 accounting firms? If so, join the club since private sector accountants are paid less too.

Please also provide an example of a government job that the private sector cant produce. And you can’t use Prime Minister or any post that doesn’t exist in both sectors.

All I remember with my short stint in the government was that they were truly lazy days. Private sector paid more but given the “work” being done, it was like getting paid like a consultant rate. To get promoted, all you have to do was apply and pass a simple test. The kind that students who havent bothered to attend classes all semester yet can get over 65% by just skimming the pages the night before.
Sad part was, there were career government employees that couldnt pass the silly test after multiple attempts. Thats your tax dollars hard at work for you folks!

#204 Rentin on 09.26.17 at 12:20 am

Garth – I too noticed your comment on taxing capital gains on a person’s principle residence.

You are going to have to pick a side. You mention that as an business owner, those individuals take on risk, and as such deserve a higher rate of return.

You constantly pound the keyboard and demonstarate that realestate is rife with risk, yet the return should be taxable now?

Your risk/return relationship argument falls to pieces.

In other european countries, homeowners are “assessed” rental income based on the ft2 of their residence. It gets added to your income and taxed accordingly.

Rent out your place, no problem, we are already taxing you. Don’t rent it out, then you must have a little more money than the rest; taxes please!!!!

Capitol gains tax on residences only will work if interest payments on mortgages are tax deductible.

#205 Bob on 09.26.17 at 12:24 am

I’m a small business owner,
and I myself and annoyed by all this ‘whining’
and the business owner vs employee vs govt employee thing.

So for all you business owners, I think we’ve lost. We really do have to suck it up and move on, make plans according to your situation.

And for all you others who are complaining that we are whining, don’t you get it? This is a result of Trudeau and Morneau attacking us, and using false statements. Your attitude towards our plight is part of the problem, not part of the solution.

We talk about income splitting is not fair for incorporated individuals. Well, Harper started introducing income splitting, Trudeau took it away. So when you accept that Trudeau makes things fair by taking it away, you are part of the problem.

We should all be asking him why Morneau stands to benefit from his corporate structure and tax changes, why Trudeau benefits from his family trusts… why most middle class people are small business owners…

#206 Bubba Gonsailing on 09.26.17 at 12:31 am

#120 Smoking Man on 09.24.17 at 9:47 pm

We need to update a few definitions of Reprobates.
My son and I had a conversation, his point of view. To succeed in life. Everyone has to eat shit no matter who you are. The better it tastes in your mouth the higher you get up the ladder.”

Ah yes, the old shit sandwich analogy. The more bread you get the less shit you have to eat. Or for our latino friends, the more taco you get, the less shit you have to eat.

#207 n1tro on 09.26.17 at 12:33 am

For all those yapping about paying into your pension like you are some sort of martyr. Realize that your defined benefit plan means it is indexed. Don’t know what that means? It means that your pension has a guaranteed return regardless of how the market is doing. So for the rest of us trying to eek out 6-7% for the last 10 yrs, your plans bought safe stuff paying less than 1% while tax payer monies made up the difference. This is why DBOs are highly prized since all you have to do is max out the contributions but I guess you want a recognition award and a hug?

#208 Owl Eyes on 09.26.17 at 12:35 am

None of this to take away from the points about fairness to small business owners… Here’s some info on the Federal Public Service (Garth’s old friends across the table). What jumped out at me was that “The percentage of indeterminate federal public servants eligible to retire as of March 31, 2016, was 10.6%, up from 10.2% as of March 31, 2015. Current retirees were recruited at a young age and had a long career in the federal public service. In the 2015 to 2016 fiscal year, 51.9% of retired employees had 30 or more pensionable years of service, compared with only 33.0% in the 1984 to 1985 fiscal year.” I am guessing that the Boomer generation was the main beneficiary of that. Millennials are not, I think, getting hired at such a young age. My guess is that the number with 30+ years of pensionable service will start to drop down to the 30% range after a time. Feds who retire at age 60 with 30 years get 60% of the average of their best five years’ salary (35 years and it’s 70%). I don’t know what the deal is for Ontario teachers, police, firefighters etc. Would be interesting to know the unfunded breakdown of the feds and each province.

https://www.canada.ca/en/treasury-board-secretariat/services/innovation/human-resources-statistics/demographic-snapshot-federal-public-service-2016.html#toc2-4

#209 Bubba Gonsailing on 09.26.17 at 12:42 am

Garth

Be very very careful, or as Lili von Shtupp, the “Teutonic Titwillow”of Blazinf Saddles would say, be wery wery careful.

Right now, some public servant is reading this blog and crafting a way to shut it down and curtail free speech. They don’t like your uppity comments agains a renowned DPM

How will they do it? Typical Canadian fashion. Call it a “promote free speech” tax and slap a per word tax on all blogs which mention politics, or public servants. They will claim it is in fairness and to help cover the pensions. Comments will also be taxed.

You have been warned!

#210 Ron on 09.26.17 at 12:43 am

Before any potential politician stands for election they should be required by law to take an intensive history course. Every great empire from Egypt and Rome to modern times follows the same self destructive path. They pander to the ignorant masses by giving them government jobs with ever increasing benefits, perks and security. They attack the intelligent, hard working people who create the wealth needed to keep the farce alive. Taxes are raised while the bureaucrats whine about how underpaid they are and that 2 hours of work a day is so exhausting. As we know from history they all collapse under the weight of this elite group of whiners. Before you reply that I don’t know what I am talking about I have several relatives in very cushy government jobs making huge money. Keep in mind that all of them might not be capable of holding and actually doing a good job at McDonalds. I am sorry to any employees of McDonalds for making this analogy as I realize that you are infinitely more capable than Canadian civil servants.

#211 Fuzzy Camel on 09.26.17 at 12:48 am

Well I’ve made a ton of money the last 5 years of this housing bubble. Looks like the good times are coming to an end for my business.

Trudeau’s communist tax is about to dropkick my ability to grow my business, housing is rolling over, and weed is about to become legal.

Time to buy a shack in the boonies and take up smoking weed and organic farming. Couldn’t contribute any less to society that way, the ultimate selfish existence. Maybe I will try to claim disability or EI, that way I’m actually negative and thus sucking from society.

Trudeau seems to encourage people sponging, so why fight it?

OK, now to business. Housing is enjoying a deadcat bounce the last month. All those 120 day mortgage pre-approvals are winding down, panic buying is happening. Silly people want in before rates go up.

Another subdivision, out of 10 houses that closed last month, 2 are up for lease the day of closing. 1 for sale. That’s 30% are likely amateur landlords.

Things are starting to get interesting, the % of people buying on spec seems to be increasing as the houses close, which means 1-2 years ago investors are really pushing up the market.

#212 Jeff G on 09.26.17 at 12:51 am

Love your blog; been reading it for years.
But you’ve missed something here.
The civil servant takes risks. Survive the government, work long hours, eschew the potential reward of the risks you mention. Good living but plain.
The incorporated take risks too. But the windfall is far higher if you win as is the loss if you lose. That’s the gamble.
The question is what will you risk and what is the value of the mundane that you don’t want to do yourself?
This argument isn’t apples to apples.

#213 Linda on 09.26.17 at 12:52 am

#90 Tim – an excellent question. Why don’t people fight to have DB pensions or a work related pension of any stripe? Well, first if you have a pension the amount you contribute reduces your take home pay. Second, it reduces the amount one can contribute to an RRSP. Third, pensions are often vested, meaning that if you leave your employer, you may not be able to cash out your pension & take the money with you. Fourth, pensions are not guaranteed, not even DB pensions. If your employer goes into receivership or is declared bankrupt, your pension contributions may well vanish like snow during a Chinook – with NO consequences to your employer, though it may well have devastating consequences for you. Truth is, most people would rather have the cash money now, not 25 or more years down the road. They do not expect to be working for the same employer for that length of time – these days, many employees equate working in the same position for more than 5 years as career path failure. In the private sector, that usually equates to moving to another employer & if you can’t take your pension contributions with you, what is the point of having a pension? The matching RRSP option is popular for this very reason. This is the genius of CPP – it is universally portable, since one pays into it regardless of where one works (excepting under the table income). However, I’ve little doubt that if most people had the option, they’d not be paying CPP because they’d rather have that money to use now. So I find pension envy rather ironic, as no one seems to mind that people pay into one. It is people receiving a pension they seem to object to, the usual cry being ‘I don’t get one, why should s/he?’. Because ‘its MY tax dollars going to pay your pension’ they cry. This ignores employee contributions, employees paying extra to make up pension deficits/shortfalls or the growth of those funds over the decades. The solution, say the envious, is to strip away the pension benefit ‘to be fair’. Well, what do the envious propose if they take away the pension benefit? Do they propose to give back all the years of contributions (plus growth) that the employees paid in? Don’t forget to add in the RRSP amounts those selfsame employees were not able to contribute due to the pension adjustment for all those years & yes, growth – say, matching the balanced portfolio touted by Garth & company – for all those years of contributions as well. Except none of the envious say one word about replacing what was paid in or the growth it might have achieved – all they want, apparently, is to take away what was promised & give back nothing ‘because they don’t deserve it’. Hypocrites. Unless you can prove that your private employer never benefitted from a government contract/bailout/subsidy then you have definitely ‘sucked at the teat’ just as much or more than any public sector worker. And most of those private sectors are still benefitting from those contracts/subsidies/bailouts today.

#214 Ron on 09.26.17 at 12:54 am

Re #203

I forgot to add that on Thanksgiving and other family get togethers the civil servants in the family take turns telling me I am a very evil man exploiting Canadians. They are vicious in their attacks. Yes I am a successful life long self employed businessman. They are too simple and ignorant to realize I am the one making their jobs and pensions possible. Without people like me paying massive taxes their fraudulent careers are toast.

#215 Upper Middle Class Sass on 09.26.17 at 12:55 am

Waaaa waaa waaa….

Nobody thinks their situation is fair.

I work for a private corporation, work a little more than 40 hours a week but since I am now salary and no longer get double overtime, I keep the hours down unless absolutely needed.

I have it pretty good and I know it. Although I did pay $80,000 in provincial and federal taxes last year. Tons of RRSP contribution room but since I don’t own a house its stupid to put it in there. Also Ill retire with ~80k a year pension plus a ton of personal savings.

I dreamed of the day I could go start my own buisiness but Ill keep riding the chariot of safety in the meantime. The government can try and tax my investments, Ill just change strategies.

Im the class they go after with recent new tax brackets etc… Believe me I can whine and complain like the best of em but its easier to be grateful for what I have and work to get more.

The same can’t be said for the rest of these hard done by people. The difference between a winning attitude and a liberal attitude.

Stop taking from me and get your own. I only have a 2 year education, caught an opportunity and rode it, who cares what the next guy has? I got mine.

You all sound like my ex wife, pissed off I have something you don’t. Willing to try and bleed me all you can but not want to do what it takes to be a part of it. Ill keep my head up and keep smiling. All the income in the world isn’t going to fix your sore attitude.

Winners win. Whiners whine. You won’t feel good about yourself until you do it on your own and overcome the challenges.

I do feel for my friends who built businesses from the ground up but they are winners and will fo what it takes.

#216 DON on 09.26.17 at 1:09 am

https://www.theguardian.com/business/2017/sep/25/bank-of-england-warns-a-consumer-debt-crisis-could-cost-banks-30bn

#217 FOUR FINGERS WATSON on 09.26.17 at 1:11 am

Look where democracy has gotten us lately. — Garth
……………………..

39% is not a democracy Garth. We don’t even have that…..

#218 crowdedelevatorfartz on 09.26.17 at 1:12 am

@#202 Lost in Space

Ahhhhh yessss.

The endless conspiracy theories from the gullibly paranoid.
Nothing you see, hear, smell or taste is real…..because the internet told you the “truth”.

Up is down, black is really white becasue no one can “prove” otherwise.

I’m just curious. Did you tell your former employer your insane , paranoid , conspiratorial ravings before you were fired or were you fired because you were constantly late due to the alarm clock “telling ” you what time it was and you disagreed with it?

The irony of your denial that space flight is impossible is a little hard to take when its obvious you’re from another planet…..

Denial is not just a river

#219 crowdedelevatorfartz on 09.26.17 at 1:15 am

@#198 conan

You must be tired of laughing……

#220 saskatoon on 09.26.17 at 1:38 am

anybody else notice how government workers, regardless of age, never really grow up?

they are like broken and immoral (often quite loud) peter pans.

#221 SWL1976 on 09.26.17 at 1:45 am

#115 Spectacle

—- Thanks Scott .

Trust your life choices and the thought you are placing those decisions is aging traction.

I like your web site.

I’m extremely busy, but would like to put something out there, to do something positive to change the damage is see coming from Canadian From Govt leaders.

So many business owners I deal with on a daily basis, have absolutely no idea what was just done to their financial future. Perhaps a series of links that people could share, eg Garths blog, your site with email petitions, an awareness section that explains quickly what Agenda30, what tax corruption is being rammed through, etc?

Thoughts?
Regards

————-

Honestly I wish I could do more. I haven’t had as much time to write as I would like as I would like to lately. We just recently opened a pizza shop and have been busy, busy, busy getting that going as well as serving delicious pizza accompanied by some food for thought.

These new taxes will definitely be hitting close to home for me. Anyone who has ever tried to open and establish a new business can assure you that there is no free ride and being labeled a tax cheat by a trust fund baby is a whole new level of arrogance dished out by our political ‘leader’. I also maintain an incorporated business in another line of work that I am considering dissolving due to trust fund babies new tax grab.

I love this blog and think that Garth has done a fantastic job doing just what he does. I admire how Garth seems to be able to effortlessly write articles daily that engage us readers, complete with witty replies about hack comments from someone with two masters degrees. The comments section here seems to also be a good finger on the pulse to how people are feeling nation wide.

I do have some ideas and will eventually get back to my own blog, but for now I’m just happy to warm up commenting here as it has been nice to actually have some spare time to join the conversation again

Can’t tax that

#222 Dave on 09.26.17 at 1:49 am

When you say these corps create half of all jobs, are all the spouses and kids receiving income sprinkling counted in the total employed????

Best get rid of the loopholes as taxpayers shouldn’t be subsidizing the “risk” of businesses through giving reduced taxes. The risk should be priced in the services and goods they provide.

#223 Quit whining! on 09.26.17 at 1:55 am

Tax all dollars the same.

About time we closed the loopholes for the ‘self-employed’. Time to level the playing field.

#224 Fortune500 on 09.26.17 at 2:16 am

AMEN! Excellent Post.

Yes to your two solutions as well.

I have said it before, why on earth, the government and the culture here encourages Canadians to treat their primary residence like a retirement vehicle, so why do we allow it to go untaxed at sale? If I rent and save the difference in investments I will be dinged for capital gains etc. when I sell.

All we are doing is creating an imbalance in behavior and incentives that is partly to blame for the massive housing problem (and yes it is a problem for anyone 35 years old an younger).

And yes, government pensions are unfair dinosaurs. To replicate them it would require private workers to save massive amounts their entire lives to even come close. Work out how much you would have to save to retire at 65 (never mind 58 or 60) in order to have a nest egg that would last until age 100 while keeping up with inflation the whole way.

Why is the majority paying for these million dollar windfalls when we have very little chance of replicating them not matter how hard we save?

#225 Smartalox on 09.26.17 at 2:17 am

Re: the 73% tax rate

This figure keeps cropping up, and it is important to note that it reflects what the taxation rate would be on retained earnings for a self-incorporated lawyer, on top of their income – net of expenses – of $220 000 per year.

At that income level, the nominal tax rate is over 50%; Now, with $100k in additional dividends, where 50% of the ‘dividends’ added to the $220k base, the effective tax payable on the total ($320k) was calculated at $73000 or 73% of the dividends added to the base.

Of course, $73k tax on $320k income is only 22.8%, but that is a lot less inflammatory.

Now, the issue here is that someone with $320k earnings can currently pay less than 15% tax on that amount by sheltering earnings in a corporation.

Most personal corporations holders that earn less, will be taxed at lower nominal rates. Also, spouses can still benefit from corporate earnings, either by doing legitimate work in the corporation, or by assuming ownership of the company either as a partner / investor, or as a shareholder, having obtained shares in exchange for earning income that is then invested in the business to support it.

The important thing is to organize everything and to document the transfers, in order to legitimize the transactions. If you don’t and then try to re-create the paper trail one the CRA comes knocking, you’ll be in for a world of hurt.

#226 Sarah on 09.26.17 at 2:34 am

Just wanted to share something I came across on-line (written by someone else, not sure who) and thought it might be helpful for some of your readers who are having a hard time understanding how ridiculous this proposed law is (my apologies if it’s been shared already).

“Suppose that every day, ten dudes go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this;

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

So, that’s what they decided to do..

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20”. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected.

They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his fair share? They realised that $20 divided by six is $3.33.

But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

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

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

Each of the six was better off than before. And the first four continued to drink for free.

But, once outside the bar, the men began to compare their savings. “I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man, “but he got $10!”

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

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

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

The nine men surrounded the tenth and beat him up.

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

And that, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.”

#227 Oft deleted much maligned stock.picker on 09.26.17 at 3:02 am

Reading through these comments it strikes me that class politics inferred on us by the civil servants Union has turned Canada into a country of greed, envy, jealously hate the neighbors success and pissant socialist drudgery. Why,? Well for one thing…..on an international standard wages are dismally low. Opportunities in Canada are almost non-existent. Aside from our own banks we have no large global companies with head office towers lining the streets. Hence no international opportunities and low wages. Canada is a land of welfare and a land of pandering for attention.

If I go to the US my salary goes up 50% automatically, so naturally I left young. Working for UK and European companies my average Canadian salary quadrupled. Naturally I took my experience to Europe for many years. But here in Canada…..only civil servants make over 100K for non specialized McJobs. Talk about fairness…there is none. The civil servant in Canada makes double what an equivelant worker will once the paradise pension and perks are added up. It take three workers gross income to pay one civil servant…..that’s put the average Canadian in the position of “sharecropper”.

OK…..I relate to the average guy….mhope that one day I’ll see a Pitchfork revolution in my birth country.

BTW……I picked a TSX listed lstock end of last week…..purely on fundamental analysis…..it’s up 50% as of last close. I hope you did your homework and backed the truck up on your TFSA. That’s the only way you can win in Canada….but don’t think the TFSA will still exist if Trudeau gets another term. Otherwise I feel sorry for you. Why is there no entrepreneurial drive or revolutionary spirit left in Canada? Are you whipped dogs?

#228 long time liberal supporter on 09.26.17 at 3:16 am

Not anymore!

#229 Dolce Vita on 09.26.17 at 3:18 am

#86 Debtslavecreator

“5 year fixed could be at 3.75-4 by late November”

From RateSpy Sept. 23 Tweet…

RBC hikes posted fixed rates to:

1yr: 3.24%
2yr: 3.29%
3yr: 3.90%
4yr: 4.64%
5yr: 4.89%
7yr: 5.40%
10yr: 6.20%

#230 NEVER GIVE UP on 09.26.17 at 3:26 am

#151 Long Branch Apprentice on 09.25.17 at 10:09 pm
Illinois is bankrupt, in no small part due to pension fund liabilities.

Give Illinois Bankrupt a Google, unless they’ve censored it.

Coming soon to a province near you.
================================

When California was wailing about their debt a few years back a quick bit of research showed that Ontario was way more indebted than California! Not a peep about it in the MSM.

https://www.fraserinstitute.org/article/ontario-vs-california-whos-really-debt

Here in BC, I could be wrong but wages are nothing like the sunshine list you have out in ON!
Wow! you guys are really greedy!

#231 polecat on 09.26.17 at 5:47 am

Garth, long time reader, occasional poster. I appreciate the time you put into this blog. I agree with you, small business people getting whacked is not cool. I am a government employee, military for 25 years. Ended up here after being laid off in the early 90’s and figured I’d go back to private sector when the recession was over.What I didn’t count on was liking the job, the best parts were serving Canadians in the Winnipeg flood, Ice storm of 98, fighting forest fires. The dirty parts were Bosnia and Afghanistan, in the latter we sent some of the guys home in caskets. I put money into my pension every month witch the gov does too admittedly, however my CPP benefits will be clawed back at 65 so I will never really see those thousands of dollars, fine with me, I don’t mind paying my fair share for the greater good. It takes a lot of kahunas to start a business and I respect those that do and fully support them, I prefer to use my kahunas on the battlefield or lugging sand bags to save someones house or setting up a generator to save a farmers chicken barn in minus 20 degree weather. Even though I may be considered a government piggie at the trough by some, I still pay a ton of taxes, support local small business and will defend anyone’s right to criticize me. I am not allowed to run for office but I can vote as well as encourage others to vote, that is what a lot of people died for in WW2. They must be shaking their heads.

#232 Under the radar on 09.26.17 at 5:49 am

I have accumulated a lot of money in my PC because I took a salary ,paid the tax , and was able to keep the rest invested. Of course the investment income is fully taxable. When I take out the surplus , more tax will be paid, either as salary or dividends . Not fair you say, why? I lived on less and saved .I could have spent everything I made and then the PC would be useless. no paid vacation , no sick days, no parental leave , no guarantee that the next dollar is coming through the door. Let everybody have a PC and see how that goes …..

#233 Gravy Train on 09.26.17 at 6:30 am

There’s a huge overlord class of public sector workers in Canada. More than 3.5 million people, or 24% of the working population. — Garth

Garth, you’ll be relieved to know that the ratio of public sector workers to working population (3.7/18.4 = 20.1%) is closer to one in five, rather than one in four!

If you exclude the 2.8 million people who are self-employed from the working population figure, then I can get to your ratio of (close to) one in four (3.7/15.6 = 23.7%).

http://www.statcan.gc.ca/daily-quotidien/170908/t002a-eng.htm

Seriously? How does that change anything? — Garth

#234 MF on 09.26.17 at 6:39 am

#194 MF on 09.25.17 at 11:42 pm

#235 Dharma Bum on 09.26.17 at 6:42 am

#17 crossbordershopper

“…that is why it might happen that many people just quit.”
——————————————————————–

You got that right.

Quit.

Be free.

Enjoy life.

Why work to pay others?

#236 Courage and Poo on 09.26.17 at 6:46 am

My friend from University stayed over at my house this past weekend. We caught up on what we’ve been up to. He’s been travelling, alot, and I’m just about to (my youngest is 5 now so gearing to drag her around the world). We did EE at U of O together. His experience in travelling revealed all these opportunities abroad. Many governments take drastic measures to encourage foreign investment.

The point is that the world is coming together during the digital age, and you can pick your environment. Canada is heavily regulated, expensive, stressed out and cold. Other countries are WAY more relaxed and chill (On the flip side we are technologically advanced). So travel, and you will see the opportunities my friend told me.

Shit here is whack, and its hard for us to see. I love my country, but I’m not blindly throwing myself at it. My business efforts will go abroad.

#237 MF on 09.26.17 at 6:47 am

#194 MF on 09.25.17 at 11:42 pm

Contract workers aren’t employees. — Garth

-Come on Garth. I should have written “Employees who are on temporary contracts” then. I didn’t know call centre employees were now entrepreneurial small businesses?

Nope.

MF

#238 Dharma Bum on 09.26.17 at 6:57 am

#102 Tax Fairness

“You have two Master’s degrees and crafted that comment? Maybe Darwin was right. — Garth”
——————————————————————–

I think he went to the University of Borat.

Verrrry Niiiiiice.

#239 MF on 09.26.17 at 7:01 am

We should be happy.

Don’t pay your public servants enough money, and you open the door to corruption and bribery.

Our government is one of the least corrupt on the planet and yet, we still complain because bus drivers and police officers get paid a living wage.

Here’s a map of showing the global “corruption perception index”.

https://www.transparency.org/news/feature/corruption_perceptions_index_2016

Take a look and see how the majority of “humankind” lives under corrupt and oppressive government….and yet we still complain.

Pathetic.

MF

#240 David W2 on 09.26.17 at 7:13 am

Garth, some errors here. It’s true business owners assume risk, but the reward could be great and one can later sell the business for a small, or in some cases, large fortune. I don’t think the avg public sector worker will get rich, and they trade that for stability. Retirement benefits are also paid by works (50%/50%) as are group benefits, they aren’t entirely funded by the governmnet. You should fix this in your post as you’re spreading misinformation, making you no better than Realtors. Thanks

#241 Victor V on 09.26.17 at 7:31 am

Ontario regulator warns that owning a home isn’t a retirement plan

http://business.financialpost.com/investing/ontario-regulator-warns-that-owning-a-home-isnt-a-retirement-plan

“Findings suggest a large number of Ontario homeowners, 45 plus (particularly pre-retirees) are replacing retirement planning with the belief that home equity gains will finance their retirement,” said the OSC, in its report. “This approach to retirement planning can be sustainable so long as residential properties maintain or increase in value. However, to the extent Ontarians 45 plus are overestimating their ability to finance their retirement using their homes, or if there is a downward pricing correction in Ontario’s housing market, a number of Ontarians 45 plus may be at risk of not meeting their retirement savings goals.”

The survey also found among those 45 plus Ontarians, who are not yet retired, 73 per cent own their homes — 38 per cent with a mortgage and 37 per cent without a mortgage. Among that group, 38 per cent have no investment savings.

#242 Mike on 09.26.17 at 7:38 am

So much for secure job for employees

https://www.google.ca/amp/business.financialpost.com/news/economy/canada-loses-39000-jobs-in-july-as-jobless-rate-rises-to-7-2/amp

Garth,
Clrealy your view on this is so misguided and entitled

Fat pensions, another lie perpetuated by rich class.

Funny. That article is 4 years old. — Garth

#243 fancy_pants on 09.26.17 at 7:43 am

thank you to all who voted me job security. Have fun with your tax burden, that was your vote/choice, not mine.

on the bright side, your day could be worse…
http://www.dailymail.co.uk/femail/article-4920492/The-people-having-worse-day-you.html

#244 fancy_pants on 09.26.17 at 7:45 am

#3 JoinTheCRA on 09.25.17 at 7:05 pm

here’s your chance mate,
https://emploisfp-psjobs.cfp-psc.gc.ca/psrs-srfp/applicant/page1800?toggleLanguage=en&poster=1080106

#245 maxx on 09.26.17 at 7:55 am

#47 Stone on 09.25.17 at 7:49 pm

…….”A little less cruelty and a bit more empathy would go a long way to make the world overall a better place.”

Kumbaya……..tell that to tptb who are doing a cosmic job at the “divide and conquer” game.

All of this economic angst and resentment is rooted in an unstable , sideways economy which our illustrious governments artfully created in the first place, since the 80s and certainly the steroidal 90s and beyond.

Fast forward to 2017, where those who believed the sloganeering by banks and that government has their backs, which is most fools, and we find levels of debt at 170% of income, much of which might never be repaid.

The light bulb is just beginning to switch on and these same idiots are beginning to realize that their retirements will likely be a living hell and definite drag on the public purse, as stress-related illness boosts the opioid crisis like the world could never have imagined.

1%ers, civil servants, private-sector incorporated tax cheats, boomers….add your own target.

A little less cruelty? When people are stuck between debt and dire futures, they will tend to be cruel. They will look for someone or something to blame.

As for empathy, pfffft!

#246 fancy_pants on 09.26.17 at 7:56 am

#220 saskatoon on 09.26.17 at 1:38 am

your blanket stereotype is equivalent to assuming everyone in Saskatchewan is an inbred farmer

#247 Willy H on 09.26.17 at 8:08 am

#129 mathman on 09.25.17 at 9:36 pm

What has happened over the years is a perverse inversion of what should be the norm. In the public sector you were paid less than the private sector, had a pension, benefits. Call it a security tax relative to the private sector.

What happened over the years though collective bargaining and innumerate people not understanding granting long term concessions, pension bumps, benefits for life would create billions of $$ in unfunded liabilities.

We have the most egregiously overpaid police forces in the world (Toronto), government workers who are paid handsomely with gold plated pensions and don’t have a care in the world.
___ ___ ___ ___

Thank-you for this salient comment.

Ontario’s teachers are the 2nd highest paid in the world with the exception of German teachers!

As for all the government folks claiming they pay for their DB pensions – it’s a bit of a sham.
– the employer (the government) pays 50% of their paycheck contributions.
– the employer (the government) cover any unfunded amounts after the DB pension has been calculated.
– many unions (teachers in Ontario are a good example) have negotiated salary increases that more than cover the DB pension contribution – in effect, the government is paying almost the full shot!

#248 Ezzy on 09.26.17 at 8:12 am

GO CANADA, let’s show the world how things are done!! I mean, we can always use the one weapon we have against this sort of abuse, in a democratic system, which is voting! Oh, wait, never mind . . .

#249 Jenny on 09.26.17 at 8:18 am

Where do you get your stats Garth? It would be great if you actually included references, because it seems you just make up numbers to make your articles more interesting. Which is really frustrating as no stats you publish can be trusted.

There are 3.6 million government employees of all levels in canada. And there are 36 million Canadians. That makes 10% of the population that are government employees. Very far from the 25% you wrote.

100% of Canadians do not work. Half do. — Garth

#250 crowdedelevatorfartz on 09.26.17 at 8:24 am

@#209 Bubba
“How will they do it? Typical Canadian fashion. Call it a “promote free speech” tax and slap a per word tax on all blogs which mention politics, or public servants…”
++++++

Nah. In typically Canadian fashion
They’ll get the Hate Speech Police or the Realtor cartel to file a Human Rights complaint.
And when they lose after 20 years in endless, mindless, expensive, taxpayer funded, court battles……They will start off by saying …..”sorry”

No one in public service gets fired anymore for gross incompetance or abuse of office…..They are usually sent packing with a massive severance package and a pension…………..perhaps that should change.

Realtor Realtor Realtor.
Happy Housing Crash!

#251 crowdedelevatorfartz on 09.26.17 at 8:26 am

@#236 Courage and Poo

Is the 5 year old the Poo part of the equation?

#252 Dups on 09.26.17 at 8:34 am

This is all scary for the long term. I bet you the Small Cap funds in Canada will go down soon, and so will a good portion of the CDN economy that was portrayed to be so shiny in the last quarter. Add one more for the CDN dollar spurt too. What a joke of a Government we have; and we dare and say Trump sucks, Trudeau and Morneau suck worst. Look at TSX it is still within 2009 levels.

#253 Wrk.dover on 09.26.17 at 8:39 am

I am surprised that there is any opposition to the Garth stance on this at all. I am the spouse of a beneficiary of the Govt pension.

#254 The Technical Analyst, CSTA, CPD on 09.26.17 at 8:51 am

“Yes, let’s make the system fairer for the middle class. ” – Garth

Garth, this is not the best way to approach this. Today’s blog post seems to purposefully pit one group against another in a socialistic dream.

You, as any should know, live in a Capitalistic society, not a Communist one. If you are finding yourself on the “wrong side” of the line, move yourself, not the line.

It is not the Government’s responsibility to improve your lifestyle, it is yours.

#255 Gravy Train on 09.26.17 at 8:56 am

Seriously? How does that change anything? — Garth

I’m just grateful that the ratio is not two in three! :)

#256 Citizen on 09.26.17 at 8:57 am

The problem with tax changes is that they are divisive. They pit one group of people against another.

As a former small business owner, I was angry at both the way in which Morneau communicated his message and the expedited process he seems to be using to push it through. I have even contacted my local MP Chandra Arya, and my question is ignored.
Additionally the small business minister Bardish Chagger has been suspiciously quiet on this issue, even though she has a mandate to support.

Yes ok all small business is going to complain it’s not fair. I don’t think that is the crux of the issue here.

I think the crux of the issue is the lack of reasonable, fair approach to holistically considering the changes to taxes. The push to the deadline date of October 2nd (through the summer months) is unreasonable.

Morneau and Trudeau display an air of entitlement and unwillingness to listen to reason. I guess having a majority government makes things easier to do what they want.

The whole process is suspicious.

#257 T2 needs to go on 09.26.17 at 9:01 am

Today, the Fraser Institute released a new study, Measuring the Impact of Federal Personal Income Tax Changes on Middle Income Canadian Families.

This study finds that 81 per cent of middle-class families in Canada are paying higher income taxes due to changes made by the federal government. On average, middle-income families with children will pay $840 more in federal income taxes this year.

VANCOUVER—Contrary to rhetoric from Ottawa, the vast majority of middle-class Canadian families are paying higher income taxes due to changes made by the federal government, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

On average, middle-class families will pay $840 more in federal income taxes this year.

“The federal government has repeatedly claimed they’ve lowered income taxes for the middle class while in reality, taking their major income tax changes into account, they’ve actually raised taxes on the vast majority of middle-class families,”

The study finds that the federal government’s income tax changes will result in higher income taxes for 81 per cent of middle-class Canadian families with children (including both single parents and two-parent households) whose incomes fall between $77,089 and $107,624.

While the government did reduce the second-lowest personal income tax rate (from 22 to 20.5 per cent), Ottawa also scrapped income-splitting for couples with young children and eliminated a series of tax credits, which more than offset the tax savings from the rate reduction and ultimately increased the tax burden for most middle-class families.

“The often repeated claim from the Trudeau government, that it reduced income taxes for the vast majority of middle-class Canadian families, is false,” Lammam said.

“By promoting one of its many income tax changes and downplaying the others, Ottawa is leaving Canadians with an incomplete picture of the overall impact of their tax changes, which is burdening the vast majority of middle-class families with a higher income tax bill.”

https://www.fraserinstitute.org/studies/measuring-the-impact-of-federal-personal-income-tax-changes-on-middle-income-canadian-families?utm_source=Email&utm_campaign=Measuring-the-Impact-of-Federal-Personal-Income-Tax-Changes&utm_medium=Dev_email&utm_content=Learn_More&utm_term=531

#258 OttawaMike on 09.26.17 at 9:06 am

#200 Dosouth
I thought last week you had finished with this? But you still didn’t answer my question. ..are u incorporated? You talk about full disclosure…just sayin’….
——————————–
I got my comment spiked for implying the same thing. But it’s not my blog..

The working world is full of precarious temp jobs and we are supposed to support the corporate tax structure.
Here’s an idea: Maintain the status quo on incorporating and legislate proper protections for workers where they receive equavalent pay rates and benefits to full time workers. This would apply to govt. jobs as well where temporary hiring is also rampant.

#259 Overproduced on 09.26.17 at 9:11 am

Thanks for this, Garth.

I will re-tweet and share. Not sure it will avert the impending financial train wreck, but it’s a start.

#260 David Hawke on 09.26.17 at 9:27 am

Advice to my grandchildren, get a BA degree in some useless subject with a major in French then apply for a cash-for-life job with the civil service, preferably the Feds!

#261 Peter on 09.26.17 at 9:28 am

I’m getting seriously tired of this. Nice chart. Now why don’t you do another one comparing incorporated individuals with sole proprietors. Sole proprietors also work 60-70 hours per week, get no group benefits, no maternity leave, no paid sick days, no paid vacation, and no retirement pension. Then explain to me why it’s fair for the incorporated individuals to pay less tax.

#262 Pete on 09.26.17 at 9:34 am

#157 Howard on 09.25.17 at 10:16 pm
Thank God for Mike Harris and the Sunshine List otherwise just imagine how much more obscene public sector pay would be in Ontario.
________________________________

You are a moron. Let’s thanks Mike Harras for selling the 407 for pennies on the dollar. Now we all get 407 bills to pay for going on a highway. Thanks Mike Harras for deregulation of Hydro from non profit to profit. Hydro bills have got up ever since. Harras is EVIL like Harper. Btw $100k in 1998 is not the same in 2017. I hate CONs

#263 Game Over on 09.26.17 at 9:34 am

@184 Penny Henny

“Whenever you find yourself on the side of the majority, it’s time to pause and reflect” — Mark Twain

#264 X on 09.26.17 at 9:37 am

Evelyn Jacks, another tax mind who is against the fairness of the proposed changes by T2:

http://www.msn.com/en-ca/money/topstories/canadians-understand-the-proposed-new-tax-rules%e2%80%94that%e2%80%99s-why-they%e2%80%99re-mad/ar-AAstIAo?li=AAgh0dA&ocid=mailsignout

#265 Dolce Vita on 09.26.17 at 9:43 am

Meanwhile, back in 416 RE Land, a surprise in Sept. rebound, for Toronto Detached:

# of Sales 397 (low, prior year Sept. unit sales > 1,000)
Avg List Price $999,900
Avg Sold Price $1,065,000
Above/Below Asking +6.51%
Monthly Change ($) +$170,000
Monthly Change (%) +18.99%
Days on Market 11

I am not a Realtor. Just noticed that since May, the monthly change was positive and quite a jump it was.

So HHCE!, do not shoot me, I was just surprised at the turnaround (save unit sales) after 4 consecutive dismal months.

Do not know for certain why.

Suspect that for the pre-approved people that have a lower rate, time running out (as an earlier post here days ago mentioned),

buy before another rate hike comes this year (or 2) and of course,

buy before B20 comes into effect, which will disqualify many buyers and lower their mortgage amount.

#266 CT on 09.26.17 at 9:47 am

Garth states that DB pension plans can be split with a spouse in retirement and then says it can lead to big savings compared to an RRSP. He neglects to share that RRSPs and RRIFs can also be split with a spouse in retirement. The field in this case is perfectly level.

Hard to take what he says seriously when he omits facts willy nilly to pursue his agenda.

Income from an individual’s RRSP cannot be split with a spouse. — Garth

#267 Dolce Vita on 09.26.17 at 9:47 am

On prior 416 RE Detached data from toronto.listing.ca I take note that not a single peep from Toronto Realtors on Twitter like John Pasalis.

I suppose they do not want to jinx the Sept. recovery in price by crowing about it.

OK, now you can bitch about this HHCE!

#268 mother on 09.26.17 at 9:50 am

There’s quite a bit of exaggeration in this post. I’m surprised it didn’t get into disparaging unionization.

That said, small business owners, or any business owner, is doing something amazing. Running a business is damn near impossible, and, as we all know, most fail. So more power to the business person. Frankly successful businesses are often just a matter of luck and good timing.

I think treating your staff well will benefit the business over time, I mean it’s 2017 and all, and a lot of work requires specialized skills and talent that is not interchangeable.

#269 FormerPSer on 09.26.17 at 9:51 am

I was a PS executive tired of the culture. As I was leaving to pursue more meaningful work, I had various senior public servants at once telling me that I was too good to leave and that I should wait for the culture to turn around, while out of the other side of their mouths telling me that I wouldn’t be able to handle life on the outside and that I should stay safe. Just hearing this even further convinced me that I was making the right choice.

Senior public servants live in a bubble, and their job is to protect that bubble. On the way out, I told them that what we do, and the protections we have, is not normal. What other Canadians do, save for their retirement or try to, move around, change jobs, get laid off, scramble, that’s normal. And if people not only survive, but thrive, in that kind of life, then what do I have to be scared of?

I’ve never been the typical public servant. I invested and never counted on my pension, so I know that I’ll be fine. And the payout was nothing to sneeze at.

One thing though, Garth, a PS executive does not enjoy the same protections as a PS employee. They serve at the discretion of those above them and can be moved, demoted or dismissed at a moment’s notice. So there is a certain amount of risk, however I will be the first to say that the salary and pension contributions more than mitigates that risk.

#270 crowdedelevatorfartz on 09.26.17 at 9:58 am

@#249 Jenny with the block(in her head)
“There are 3.6 million government employees of all levels in canada. And there are 36 million Canadians. That makes 10% of the population that are government employees. Very far from the 25% you wrote.
+++++++

Bwahahahaha.

Let me guess, you’re a university educated “civil” servant?

36 million Canucks in total ( that means every man , woman, child …..)
Aprox 18.4 million are employed

So 3.6 million civil servants may not be 25% but its close enough especially if you include police, firemen, garbage men, sewer workers, and on and on and on. I’m sure the ratio of govt employed workers in this country is much higher than 25%

#271 Fred on 09.26.17 at 10:01 am

brilliant blog entry, Garth . Thank you for sharing

sent it to colleagues….hopefully, spreads like wildfire

enjoy your day

#272 Eks dee Sipal on 09.26.17 at 10:03 am

Great article, Garth. Eye-opener, personally impactful and concise and to the point. But I think your summary of Private Employees is out of date by a long shot. As a Gen X, I know that unless your company is US-based, your wage and benefits package in Canada is pitiful compared to the public sector. But that just means that there is a race to the bottom by private corporations in Canada, and NOT that you should be tearing down your civil servant brethren. And to be fair, I don’t think you did that in this article, but I know many Conservatives would take it that way for sure.

Entrepreneurs take risks. Sometimes totally unnecessary risks. I just saw a brand new $75,000 (estimated) reefer cookie truck this morning from a cookie making operation. But all I saw was an Albatross. Business owner probably thought they could “expense” the vehicle. I see 80% probability of failure within 3 years. Cash flow is king. If your business is not generating enough cash to literally give away, then you should not be in business, or you should educate yourself more in order to generate the cash flow. If you are a restaurant operation, NEVER lease your premises, you must own the building. Only go into debt in business if you see the cash flow coming, or if the bank is willing to give it to you (which is rarer than a purple pumpkin). Otherwise, start small. Small is beautiful. Get big slowly, like one of Garth’s geriatrics:)

So, 25% of the population are willing sheeple. Looking to the government to take care of all their risk, just put in the mind-numbing hours and go home and come back and be a wage slave and listen to the morning news and pretend to care. What a waste of a life. Are you one of these people? Wake up. Start a business. Not you, Leo. You keep enjoying your Aberfeldy and let the real adults and non-RE entrepreneurs have a discussion. Ha ha, okay, I’ll stop picking on Leo (for a while).

#273 TurnerNation on 09.26.17 at 10:06 am

Why should I be thankful of clean water? Why it’s only governments which allow corporations to foul it up. They turn a blind eye. I’d never put poison my own water.

– Proof we’re in a 2nd World country: more advanced eh?
Ancient technologies like electricity, air conditioning are rationed with false scarcity due to graft of unions and governments. Total Mind Control.

We pay 60% of our income in total taxes for FALSE SCARCITY and RATIONING. But they want free Wi-fi in classrooms to douse kids in it

http://www.cp24.com/news/teachers-union-urges-gov-t-to-do-more-to-cool-off-classrooms-amid-fall-heat-wave-1.3605023

“Currently, Bird said, only 125 of the board’s 584 schools are fully air-conditioned and the remainder have either partial air conditioning or none at all.
“We would love to be able to install air conditioning in all of our schools… we’re talking hundreds of millions of dollars, not to mention electricity costs, maintenance, repairs, that kind of thing,” he said.”

#274 Lead Paint on 09.26.17 at 10:09 am

Best post ever Garth! Thank you for spelling it out clearly. Going to share this on Facebook, LinkedIn, and if I can figure it out, Twitter!

#275 Eks dee Sipal on 09.26.17 at 10:11 am

#55 Ian…. The Conservatives had years and years to change things. What did they do? Diddly squat. Vote for your independent in your riding. The resulting political landscape could not be any worse than what we have before us. So, why not?

#276 Mattl on 09.26.17 at 10:12 am

Good post Garth. Its insane how rich DB pensions are.

I do wish you’d recognize in these posts that its not only small biz owners that are about to get screwed. High wage earners are easily the class of Canadians getting hit the hardest by taxes. They took away our income splitting, added a new tax bracket, reduced the TFSA. And we have very little job security – we turn over every 4-10 years and are owed 2 weeks per year – and barely anyone in the private sector gets a DB pension. For benefits I get Canadian healthcare which I pay $150 a month for in BC, and 200 bucks towards glasses every 2 years. 1000 dental for each family member.

I have to earn 80K to save 45K just to possibly have as much at the end as a teacher will have that puts nothing away. And for the pleasure of that I get to contribute 90K a year in income tax.

So ya I don’t want to see small biz owners get hit but high wage earners have been getting crushed by T2.

#277 Dolce Vita on 09.26.17 at 10:23 am

I was not happy at first about business owner income sprinkling. Decided to some research.

It changed my mind. I have no problem with it now.

In specific cases, this can be done by employees and avoid attribution rules.

Do not know if all this is possible, but here is the original article from the G&M about Income Splitting (really Sprinkling in some cases):

https://beta.theglobeandmail.com/globe-investor/personal-finance/taxes/splitting-income-is-a-great-way-to-save-tax-but-you-must-do-it-properly/article33604366/?ref=http://www.theglobeandmail.com&

Followed by 10 specific methods (1 of them only if you are a business owner):

https://beta.theglobeandmail.com/globe-investor/personal-finance/taxes/ten-income-splitting-ideas-for-canadians/article33676293/?ref=http://www.theglobeandmail.com&

As for the rest, small business owners should be allowed to shelter/invest income within their company, distribute dividends to their shareholders etc. just as any large corporation does. There should be no distinction between the two.

For example, some of the richest families in Canada have majority or minority ownership in large corporations originally started by their families. They made their money by taking their companies public and keeping shares in the public corporation to continue benefiting from their success in share capital gains and dividends.

The familial argument for private corporations many here object to is being done as I type by large family all or part owned public corporations.

There should be no difference between them.

#278 IHCTD9 on 09.26.17 at 10:34 am

#11 kommykim on 09.25.17 at 7:17 pm
Well, considering that the government in the 1990’s raided 28 Billion from public servants, the RCMP and the military pension plans, your argument rings hollow about the shortfall.
________________________

That’s nothing compared to what the Liberals did back in 1936, or was it 1926…?

Can’t remember, but it was mean and bad, that’s for sure.

#279 Eks dee Sipal on 09.26.17 at 10:35 am

#116 Smoking Man

Thanks! That should be the national anthem for this blog. Will be the first song downloaded on my new iPhone X.

So close no matter how far. Forever trust in who you are. I have it on loop for today on my buds. Love it.

#280 n1tro on 09.26.17 at 10:36 am

#194 MF on 09.25.17 at 11:42 pm
I can’t stand this fake “war” between the private and public sectors.

Good friend works at the cra. They just closed a call centre in downtown Toronto and laid off all their contract workers (about 80% of the place) and she is out of the job.

She made 45k an hour and had zero stability.

Please tell her “how good she has it” again.

MF

Contract workers aren’t employees. — Garth
——————————-
So the skills set to be able to pick up a phone and answer inquiries is worth $45K a year? Keep in mind the CRA helpline encourages operators to stay on with the public for longer than 2 mins per call in a convoluted thought process of providing “quality service” to the public. Private sector help desk jobs pay less so your friend is lucky.

https://www.payscale.com/research/CA/Job=Help_Desk…/Salary/1f4faa13/Toronto-ON

She should have applied like crazy for internal postings.
God knows the competition internally isn’t hard. Select a useless degree and get a job that can easily be replaced with self serve online portals and expect no stability in either sectors.

#281 Dolce Vita on 09.26.17 at 10:40 am

#61 blessedbypotato

Compelling arguments if it were not for the fact that those employee taxes you speak about, arise from an entrepreneur that successfully started a business which hired employees that pay those taxes.

No business. No employee. No taxes paid.

A successful business that generates enough income to pay employees which in turn are taxed by Government to help fund all the things you list such as roads, hospitals, policing etc.

Estimates seem to vary, but about 50% or more Canadians are employed by small business.

Since business owners pay a corporate tax to Government and then income to employees which in turn pay taxes to Government; rather, I would conclude if Government services were doled out on a “rights basis” then MOST certainly small business owners would be at the top of that right to services list since:

-Corporate taxes to Government
-Income paid to employees that pay taxes to Government
-Their income from the business which is taxed.

#282 241A65 on 09.26.17 at 10:48 am

Hey Garth –

A fine column, as usual, touching on many points I’ve been mulling for years, especially this public sector/private sector pension benefit split. THAT is the real issue, not 99% versus the 1%, but over-entitled government workers and their outrageous claims on the taxpayers. Why the Conservatives haven’t picked up on this issue I don’t know, but the Liberals are the party of the bureaucrats and will ALWAYS take care of them in return for votes.

Speaking as someone in the private sector who has NO company pension – hardly a rarity these days – I would respond to any party that seeks to roll back the expense of government labour. They might even get my vote, too, but I’m not holding my breath.

#283 BC_Doc on 09.26.17 at 10:54 am

Well said GT. One of the best columns you’ve written.
BC Doc

#284 Dolce Vita on 09.26.17 at 11:01 am

I recall my Entrepreneurship Prof at Ivey School of Business, about 30 years ago, stated that the difference between Americans and Canadians was:

“Americans aspire to be their own bosses; whereas,

Canadians aspire to become Civil Servants.”

Yup, he was correct and history, in this case, merely repeats itself.

Great course. Case driven course. Each case in essence a Business Plan/Story about the Entrepreneur, their business idea, how they gathered funds together etc. Class was a debate about:

“Would you bet the ranch and your marriage and go it alone?”

Sitting thru the 1.5 hr class was the Entrepreneur in the case, in person and quietly listening to the discussion. They then revealed what happened at the end of the class. Not all made it. Some very successful for the times.

Inspired me to give it a go myself. Worked out good.

#285 IHCTD9 on 09.26.17 at 11:02 am

#16 FOUR FINGERS WATSON on 09.25.17 at 7:22 pm

So why do we keep on electing liars and a**holes who promise to change things but only end up making things worse ?
_________________________________

The best thing a modern Canadian Politician can do is nothing. Anytime they get an idea it’s stupid, has less than 1% chance of doing any good for anyone, requires a whole new bureaucracy, and costs 100 Billion dollars.

After the smoke clears, and more often than not; we get the opposite of what they were trying to do in the first place.

Everyone has good intentions, but you know the destination of the road paved with these. Modern Canadian Politics is good for nothing.

Look at the Billions Trudeau has incinerated with absolutely nothing to show for it. Listen to the useless crap coming out of his mouth. Now the taxes have to go up to pay for his cement headed stunts.

Let’s get real here, it doesn’t matter who we elect, it doesn’t matter what they promise, the complexity and bloat across the board has forced us onto a single track – one well travelled by other brokeass governments before us.

Cost of government will keep rising. Taxes will keep rising. It doesn’t matter what party you vote for, the results will be the same (although some politicians make much larger and expensive mistakes like our current dingbat birdbrain doorknob PM).

Do yourself a favour and start offsetting your tax exposure. Speak the language that can’t be ignored.

#286 peace&love on 09.26.17 at 11:03 am

T2 lovers ♥ please read
http://www.christianpost.com/news/greedy-capitalists-didnt-rape-venezuela-greedy-socialists-did-200478/

#287 Feds on 09.26.17 at 11:07 am

I am a gov’t worker. Although the pension is a nice asset, Garth makes it sound like it is handed to all employees. I make about 87K per year with my two degrees. Every two weeks I get a pension deduction of $370 off my cheque. I have been paying this for 25 years. The pension is a good ride but is by no means just handed out. Anybody working for themselves or for an employer putting this away every two weeks and investing it for 25 years would have a nice nest egg under any employment scenario. Having this amount matched or a defined benefit is great, but by no means just handed out.

#288 Keith in Rio on 09.26.17 at 11:07 am

My sister is the text book definition of what is wrong with the public service.

Has a GED. And IMHO isn’t qualified to wear a paper hat znd a headset. 50 years old.

$64K a year……27 years in the public service as a paper pusher. I know what she does and some $40K a year college grad could probably provide more value to the government then she does. What a joke……we’ve got communism….. errrrrrrr, unions to thank for that.

#289 2 Cents Canadian on 09.26.17 at 11:12 am

When one looks at your chart you have to ask yourself ….. who should be taxed more and who should be cut a little slack? The fact that the governent is groping for more tax dollars on your left column is sickening. The world is going global (pun intended) …. Canada has to get in the big ring and compete. This philosophy to keep hacking an inch off of the legs of the ambitious and driven every year (and crushing dreams and motivation) does not build a long term structure to build industry. Industry is what makes jobs. You have create an environment for a small percentage of the population to take the risks necessary to run companies and employ Canadians. This philosophy of targeting the last few people who still somehow make a high income is ridiculous. When you’ve wrung the last few drops ($) out of a wet towel ….. where is the country left? Isn’t letting one risk taker (who starts a company) make a million dollars (and taxing him “reasonably”) who employs 50 people making $40-$50,000 (and taxing them “reasonably”) better than demotivating that risk taker to not start a company and go work for someone else for $50,000?
You have to let there be a carrot to go for. There has to be an environment of hope!

#290 Employee10056554 on 09.26.17 at 11:30 am

Love your site.
So sick of your whining.
How many years of your life were you a lowly employee and what was your motivation to form a business?
An employee has very little security. I have seen hard working employees laid off at 55 and never rehired. Who wants to hire a 55yr old employee when they could hire some fresh meat. I don’t think you can see the risks employees take…it’s hard to see from the mountains of cash you sit on.

So you want to pull down others who have taken a different route? Sad. — Garth

#291 Smoking Man on 09.26.17 at 11:35 am

What a moron. He’s about to unleash a killer plague on small biz and this is what he’s passionate about.
Total loser.

https://youtu.be/BHacFI8K6ck

#292 MarkM on 09.26.17 at 11:38 am

Stopped reading and didn’t finish article because my blood started to boil.

#293 Giver - AB - The Price of Admission on 09.26.17 at 11:56 am

I guess that’s the price of admission… Sometimes you have to wade through fact-less partisan drivel for the odd nugget of useful insight.

And I fall squarely in the left hand column.

Today’s post was’t worth reading.

#294 IHCTD9 on 09.26.17 at 11:56 am

#36 I’m stupid on 09.25.17 at 7:39 pm
On another note, I saw your old boss Stephen Harper in New York this weekend. How many wish he won the election instead of Mimbo Trudeau!
__________________________________

Many Canadians like Trudeau just fine unfortunately.

Harper was such a mean, bad man, who cares if he actually ran a surplus on and off the year he was booted.

Now we’re near 30 BILLION opposite of where Harper left us, do Canadians care?

Probably not.

#295 ALFRED E. NEUMAN on 09.26.17 at 12:13 pm

#274 Lead Paint on 09.26.17 at 10:09 am
Best post ever Garth! Thank you for spelling it out clearly. Going to share this on Facebook, LinkedIn, and if I can figure it out, Twitter!

I wholeheartedly agree. All that’s going on in the minds of the Feds is very worrisome.

#296 Iconoclast on 09.26.17 at 12:20 pm

Maybe the Conservatives will be able to tap the current anger into their next platform.
They can push the “we have a spending problem” angle instead of “we have a revenue problem”.

Here’s a start:
– 25% across-the-board cut to Federal Payroll. (exempting only front-line military and CRA, maybe)
– Ban double-dipping (or penalize it with pension clawbacks)
– massive automation push

#297 IHCTD9 on 09.26.17 at 12:21 pm

#42 Canaussie on 09.25.17 at 7:42 pm

I confess that I voted for the federal Liberals. Basically an anti Harper reflex. I’ve been extremely disappointed as I’ve watched Trudeau turn into a red Harper with fancy socks. Shafting hard working self employed people and ignoring the imbalance between public and private workers is the last straw.

___________________________________________

Hopefully wisdom has been gained.

#298 n1tro on 09.26.17 at 12:35 pm

#239 MF on 09.26.17 at 7:01 am

Here’s a map of showing the global “corruption perception index”.

https://www.transparency.org/news/feature/corruption_perceptions_index_2016

Take a look and see how the majority of “humankind” lives under corrupt and oppressive government….and yet we still complain.

Pathetic.

MF
———————————
Are you serious? That is a corruption “perception” index. It’s about as useful as a “happiness” index. Is it surprising that populations with lower incomes “perceive” there are more corruption than populations making alright money??

Also, corruption can’t be just measured in money but also in power. US lobbyists are an example of money and power corruption yet the chart shows the US being just slightly orange.

#299 MF on 09.26.17 at 12:36 pm

80 n1tro on 09.26.17 at 10:36 am

Not how it works.

Accountants, doctors are at risk of automation too. That is a fight we are all facing.

This joke post was about how good the “entire” public sector has it. I proved otherwise (as have a ton of others in the comments).

Thanks for proving my point though.

MF

#300 MF on 09.26.17 at 12:38 pm

2 241A65 on 09.26.17 at 10:48 am

Why not just move to Mogadishu?

ZERO government workers there so you will be in a utopia.

MF

#301 PastThePeak on 09.26.17 at 12:40 pm

So much vitriol and bitterness on all sides! I guess you have to hand it to the Liberals – their approach to class warfare / divide-and-conquer is working like a charm. Each side just dying to tear the other down!

Reading the comments section of any Internet publication/blog is the surest way to lose faith in humanity…

#302 The Gravy Train Has Stopped on 09.26.17 at 12:43 pm

So it’s happened; the pyramid has flipped over. There are more people drawing off the top than at the bottom. A failed design from the beginning. No employer can pay for retired workers. That era was fairy dust and now gone.
Governments knew this was coming. It’s called Stats. They’ve been collecting and watching population info for decades.

#303 Arctic Gringo: Qalunaaq on 09.26.17 at 12:45 pm

Want a good salary? Go here:

http://www.nunatsiaqonline.ca/stories/article/65674nunavut_tops_canada_in_household_income_growth_statscan/

Cold, though.

#304 MF on 09.26.17 at 12:45 pm

250 crowdedelevatorfartz on 09

Will somebody tell this boomer to stop “whining” about public servants. Sounding awwwwwfully like a millennial.

:)

MF

#305 Rifles on 09.26.17 at 12:52 pm

A sad but fair comment on the state of the nation, Garth. I had dinner with a wealthy friend the other evening. She believes that this is fair, that those who use the structures are mostly high earners and are essentially tax cheats who can afford to be forcibly divested of their savings gained through loopholes the government seeks to close down. The collateral damage will be small and ultimately serves the greater good.

#306 Game Over on 09.26.17 at 12:53 pm

For starters, One thing in the public sector that should be rolled back immediately is the car allowance. I’m sorry, but you should be able to afford your own f***ing BMW.

#307 Dissident (re: "Pension" in table above) on 09.26.17 at 12:55 pm

What about “Employees” who don’t ever have access to a company pension? Plenty of people out there like that.

“According to 2008 figures from Statistics Canada1,
only 38% of paid workers had a companysponsored
pension plan as part of their compensation. For those who are covered, the two main types of
company pension are the Defined Benefit pension plan and the Defined Contribution pension plan.”

https://www.retirementadvisor.ca/retadv/apps/articles/pdf/Companypension.pdf

A Company Pension is different from the Canada Pension Plan (CPP) and Old Age Security (Over 65) (OAS).

The difference is that a CP is something decided on within a company and paid by the company, versus the CPP and OAS which are paid out by the government based on time of retirement, how much CPP contributions were shaved off one’s salary throughout the year, and your age.

My dad has a company pension plan but my mom does not…because she worked as an employee of a small business owner… :) :) :) Ah, the irony! That small business owner didn’t feel like investing in his employees. He was super cheap and greedy, and I often scolded her for having stayed there so long. So, working for a small business owner is not always the best way. They often screw over their employees. They did not go into business to ‘finance others’ lifestyles’, as I’ve heard some say.

Nowadays, pensions are synonymous with government employees and possibly those belonging to a large institution. Definitely not the norm, and most definitely not common to small businesses. And yes, taxing small businesses more is likely going to give small business owners more excuses as to why they should not treat their employees more equitably.

Bottom line, small businesses are usually only beneficial for the owners, and often less beneficial to the employees. I am sure there are exceptions, but they are few and far between. In many cases, employees of small businesses are actually incurring more risk than the small business owners.

In the table above, I would have put an asterix beside ‘pension’ for ’employees’ with a note stating that this is definitely not always the case.

#308 Oft deleted much maligned stock.picker on 09.26.17 at 12:56 pm

Trudeau is madly hiring civil servants in advance of the 2019 election…..why? Because civil servants have a built in dependence on the Liberals for their jobs……the unions spend millions telling them their lives depend on maintaining relations with Trudeau. We saw this same relationship development in the maritimes when the Liberals through everyone onto welfare dependence after the Liberals killed off the fishery through mismanagement. People thought they had to vote Liberal because round the clock propaganda told them they’d be thrown into the street if the opposition took office….leaving millions of maritimers dependant on liberal welfare to this day. Now with 24% of the population welfare dependant on Trudeau….this is a type of corruption we’ve never seen on this scale. It’s insidious. We’re shown images and talking points of immigrants being the bad guys….but this is just misdirection. The real problem is our govt creating unions so powerful that they out vote every other community….pure corruption….pure sleaze.

My stock pick was halted today….requested to comment on the 50% rise. The company replied that nothing new has happened. Simple enough because the fundamentals have been obvious for months and just a few information junkies, like me, follow that closely. This will gain a dollar for every dollar the commodity rises. The debt is well managed. So far so good.

#309 r1200c on 09.26.17 at 12:56 pm

According to Statcan (2016 numbers) 72% of government workers are women, 5% FN, 5% disability and 15% visible minorities non FN.

To cherry pick an anecdote with deputies to illustrate that all gov employees are fat cats with fat pensions is nothing short than misleading.

#310 Deckard on 09.26.17 at 12:58 pm

“What a moron. He’s about to unleash a killer plague on small biz and this is what he’s passionate about.
Total loser.”

A freak show. Can’t believe this nut-bar Trudope got elected. I feel like I’m living inside an episode of the Twilight Zone.

#311 n1tro on 09.26.17 at 1:00 pm

#249 Jenny on 09.26.17 at 8:18 am

There are 3.6 million government employees of all levels in canada. And there are 36 million Canadians. That makes 10% of the population that are government employees. Very far from the 25% you wrote.
—————————————-
Reasoning like the above example is why Canadian children need less math and more logic courses. No point having perfect math when the premise is messed up to begin with.

#312 Lost..but not least on 09.26.17 at 1:06 pm

#218 crowdedelevatorphartz.

Matters not…
Lots of critique and subsequent critical thinking by a number of people that the space programs are highly dubious…

Anyone that seriously believes man landed on the moon
is prime propoganda bait.

PS perhaps provide proof that they did.(oh…you saw “it” on TV…?)

#313 Dissident (re: "Pension" in table above) on 09.26.17 at 1:14 pm

Btw, the word “Pension” is mentioned 205 times on this post and comments section…methinks you hit a nerve.

#314 RentYVR on 09.26.17 at 1:16 pm

Your chart is inaccurate. Many employees work well over 40hrs a week with no overtime. And employers don’t pay 100% of health or pension benefits, not even close. Where did you source this info?

#315 Phil on 09.26.17 at 1:19 pm

Hi Garth,

Video of Cooper talking about the independent review of money laundering through Casinos.

https://twitter.com/VancouverSun/status/911285785336229888

Cohodes has been pounding the table about money laundering in Canada. Could he be right, again? Incredible the stuff he finds.

#316 IHCTD9 on 09.26.17 at 1:27 pm

#57 Willy H on 09.25.17 at 7:55 pm

It only confirms what I have (sarcastically) posted in the past:

Only fools work in the private sector below senior management levels. All the money and post-retirement benefits are to be found almost solely in the public sector. [sarcasm off]

Needless to say I will encourage my children to either become entrepreneurs or find public service work.
_______________________________________

Same here for the most part. Even though some day the S will HTF for government finances and everything connected to it, the private sector SHTF has essentially already happened.

Sucks, but if were young and smart enough to take advice – I’d try and get a Cop/Firefighter job in a smaller city.

I’d then proceed to chill like Flynt, and save like Scrooge – until the gravy train comes off the rails.

#317 under the radar on 09.26.17 at 1:29 pm

#261 nothing to stop a sole proprietor from incorporating

#318 X on 09.26.17 at 1:40 pm

So in the name of tax fairness….all of the people complaining about the unfairness of corporate tax rules, I am sure (lol) are also in favour of the same personal tax rate for all, as well as eliminating the maximum RRSP contribution, as a maximum is unfair to the wealth and all should be able to contribute 18% of their earnings.

Wake up, the average Canadians tax bill rose last year. T2 pitches to tax the rich, but he means everybody!

#319 CT on 09.26.17 at 1:53 pm

Garth, pension splitting is available for pension income, RRSP annuity payments, RRIF withdrawals, and more. I don’t know why you think only “pensions” can be split?

From taxtips.ca:

“Eligible Pension Income

For taxpayers who are 65 or older in the year:

– life annuity payments from a superannuation or pension plan, including life income funds (LIFs) and locked-in retirement income funds (LRIFs)

– payments from a RRIF (non (sic) just minimum withdrawals), which includes life income funds (LIFs) and locked-in retirement income funds (LRIFs)

– annuity payments from an RRSP or from a deferred profit sharing plan (DPSP)

– certain payments on the termination or winding-up of a DPSP

– regular annuities and income averaging annuity contracts (IAAC) reported in box 24 of a T4A or box 19 of a T5

– since tax year 2010, annuity payments from the Saskatchewan Pension Plan (SPP)

Qualified Pension Income

For taxpayers who are less than 65 for the entire year:

– life annuity payments from a superannuation or pension plan

– payments from a RRIF, or annuity payments from an RRSP or from a DPSP, which have been received as a result of the death of a spouse or common-law partner

– since tax year 2010, annuity payments from the SPP”

I said RRSP withdrawals cannot be split, attributed to two taxpayers. Correct. — Garth

#320 jess on 09.26.17 at 1:54 pm

#70 Ian on 09.25.17 at 8:09 pm
pay system IBM …
I thought in Canada, quantum meruit is not based on contract law but rather depends on equitable principles of unjust enrichment.
=====

#321 Where's The Money Guido? on 09.26.17 at 2:02 pm

Re: #16 FOUR FINGERS WATSON on 09.25.17 at 7:22 pm
So why do we keep on electing liars and a**holes who promise to change things but only end up making things worse ?

The answer is they all bow to the same lord. Read some of the numerous posts that have spelled it out.
They are ALL on the same team once they get voted in and it’s not your team!!!!! There is a war on the regular joe and they will NOT stop until they’ve enslaved everyone that isn’t in the cabal.

#322 IHCTD9 on 09.26.17 at 2:03 pm

#67 Millennial905er on 09.25.17 at 8:08 pm
Meanwhile, lots of incorporated individuals reap benefits public sector workers couldn’t dream of enjoying :

“they can make their own hours,” – Yeah, 24/7/365, sounds awesome.

“drop off and pick up their kids at school,” – LOL!

“take days off at their leisure,” Double LOL!

“outsource their work, etc.” – Yeah, all my plumber buddies are outsourcing their work out to India.

“There are advantages to every career path.” – You have no clue. None. Hilarious.

#323 jess on 09.26.17 at 2:04 pm

“shared services” = outsourcing

I am reminded by an article
Andrew Coyne: Hiring foreign workers in Canada is a crime, but outsourcing overseas is fine

http://nationalpost.com/opinion/andrew-coyne-hiring-foreign-workers-in-canada-is-a-crime-but-outsourcing-overseas-is-fine

====

#324 Samantha on 09.26.17 at 2:05 pm

I don’t think liberals will be able to hold onto power in the next Federal elections with their tax everything policy. I hope we don’t see another liberal government for decades!

#325 jess on 09.26.17 at 2:07 pm

Concentrix loses HMRC contract after mistakes http://www.independent.co.uk/news/uk/politics/concentrix-loses-tax-credit-contract-hmrc-latest-a7264801.html
just search payroll scandals …it isn’t just here

#326 Yuus bin Haad on 09.26.17 at 2:09 pm

That Bill! What a card! At a recent function, while dishing out the party line, he asked: “Would you like fries with that?”

It breaks me up every time he uses that one.

#327 jess on 09.26.17 at 2:10 pm

a debate on Trusts

The main points of our original paper remain:

To tackle corruption, money laundering and tax evasion, all express[3] trusts should have to register their beneficial owners, and this information should be publicly available. The Financial Action Task Force (FATF) Recommendations[4] on Anti-Money Laundering already require companies, partnerships and foundations, including private foundations (the latter are extremely similar to trusts, in their control structure and tax planning purpose) to register in a government registry and have some basic information publicly available[5]. More and more countries[6] (including the EU) are now requiring companies, partnerships and foundations to register also their beneficial owners in an official registry. Some countries[7] are providing even free and online access to this data in open format. In this context, excluding trusts (which may be equally engaged in illicit activities as any legal person) from beneficial ownership and registration requirements is not only unjustified, but also undermines the effectiveness of the above new transparency requirements for companies, partnerships and foundations.
Legal abuses. Countries should be made aware of how some trusts allow abusive goals (tax avoidance, violation of inheritance laws, securing assets from legitimate creditors) and decide whether they want to keep those privileges, and how they want to react.

“Trusts: Weapons of Mass Injustice?” A response to the critics

September 25, 2017 by TJN Admin Leave a Comment
http://www.taxjustice.net/2017/09/25/response-criticism-paper-trusts-weapons-mass-injustice/

#328 jess on 09.26.17 at 2:15 pm

The focus on trusts

Trusts are certainly not the only type of legal structure subject to abuse. Elsewhere, we have also analysed companies, partnerships and foundations. We carefully assess each in the Financial Secrecy Index,[9] and have written papers[10] about their effective beneficial ownership registration.

Yet unlike these other structures, trusts are hardly ever the focus of registration and transparency advances. For example, the EU’s 4th Anti Money Laundering (AML) Directive[11] requires registration of beneficial ownership in a central register of all legal entities (companies, partnerships and foundations) that are created or incorporated in an EU country, regardless of their commercial or non-commercial activity, as a precondition for their existence as legal persons.

Yet this is not true for many trusts (which are considered ‘arrangements’, not legal persons): registration is only required when they have tax consequences. Discussions about the 5th EU AML Directive (currently underway) propose public access to all legal entities, but only to some trusts. Why? Trusts can be just as abusive — if not more so, as described below – as companies and other legal entities. So we should expect trust transparency measures to be at least as comprehensive.

We think there are two reasons for this special treatment.

First, because trusts are described as legal arrangements (as opposed to legal entities). Second, many current legal structures use the word “trust” in their name, giving the impression that these are private family matters, as in the original (praiseworthy) purposes of trusts that originated in the Middle Ages. But some of the commonest “trusts” these days, such as asset protection trusts, discretionary trusts, and purpose trusts, may serve abusive purposes, enabling users to escape the responsibilities of society that bind everyone else. Many such “trusts” shouldn’t be considered trusts at all: they are shams (and we don’t follow the UK and Jersey’s legal meaning of the term “sham”, see page 18 below). Trusts and “trusts” are often explicitly promoted to ensure secrecy, to prevent assets from reaching legitimate creditors, and to violate foreign laws. Commercial trusts are widely implicated in the global financial crisis and other ills.

#329 IHCTD9 on 09.26.17 at 2:21 pm

#80 Willy H on 09.25.17 at 8:20 pm
Know of one situation where a specialist police officer’s salary increased 35%+ over a 4 year period prior to retirement. This officer was “promoted” to slightly higher positions with a larger salary bumping up the average salary over the final 5 years from which the DB pension would be calculated.

This police officer will earn as much in retirement as they did as a salaried officer 5-6 years from retirement! Around $70K per year DB pension.
______________________________

Yep, drive by a retired Cop’s house out my way – big diesel 4×4, big boat, big house lol!

Be a small town cop, break up a few drunken brawls every now and then. Go home and relax counting the well paid days to retirement.

Better yet, a Firefighter – head to work for a relaxing sleep during one of those smartly negotiated 24 hr shifts. Nothing like catching some ZZZ’s while making 90K a year. Oh, and maybe put out one or two house fires per year.

These guys just have it made in the shade. That’s why if you look at the roster at any of these stations it looks more like a guest list for a family reunion…

#330 2 Cents Canadian on 09.26.17 at 2:24 pm

Dear Mr Trudeau …… So you’re saying “the budget didn’t balance itself” after all? But you said it would. What happened? Who was doing your math? I hope you fired them.

#331 Ace Goodheart on 09.26.17 at 2:27 pm

Still prefer running businesses and investing to being an employee of any kind. Sure you can put in your formula driven 25 or 30 years, snag your pension and live a few gray years till you drop dead of old age something or other.

Or you can run a few businesses, make a couple of really good real estate plays, and retire with a mil in the markets at 8%, three houses and a bunch of wild memories that make great stories.

And you can keep running your chosen favorite of the biz part time to get you out of the house.

Still pref my life to that of a wage slave.

#332 Ace Goodheart on 09.26.17 at 2:29 pm

Oh and my method had retirement after 12 years of full time work with 80k per year as a home built “pension” .

#333 Ian on 09.26.17 at 2:33 pm

More US Fed talk today folks. It’s heating up!

I’m almost 100% now that Yellen will not be reappointed. So this could way change the Fed’s and BoC’s moves next year. Could be someone much more dovish. More to come!

http://www.marketwatch.com/story/senior-republican-senator-says-he-thinks-trump-will-not-reappoint-yellen-to-fed-2017-09-26

#334 Courage and Poo on 09.26.17 at 2:34 pm

#251 crowdedelevatorfartz

The Poo part comes before Courage in the equation. I shit you not.

#335 IHCTD9 on 09.26.17 at 2:37 pm

#84 TEMPLE on 09.25.17 at 8:23 pm

Nice dog whistle again, Garth. Good job pretending public servants don’t pay a huge amount of their salary into their own pensions.
_______

Huge? Like what, 20%?

If my boss volunteered to pay 80% of my retirement contributions, I’d have a ******* heat attack. That isn’t going to happen in a billion years.

Here – I’ll give you the portion that I pay into my retirement plan: 100%

___________________________________________

“I make 25% (yes, one quarter) what my private sector counterparts make. I’m so lucky.”
___________________________________________

Let’s assume you make Minimum Wage in Ontario. So your private sector counterparts all make $46.40/hr and up? But you’re only getting 11.60/hr doing the exact same job for the government?

I’ll just go ahead an assume you’re full of sh!t, thanks.

Good job reinforcing the perception that public servants are living in lala land with absolutely no clue what the hell is going on.

#336 Kayaker23 on 09.26.17 at 2:41 pm

I just want to dance!!

Okay – right = wrong, up = down, in= out .. bottom line is that this country is heading for a financial crisis at some point in the future. We are writing cheques we can’t cash and all we can bicker about who can beat their chest the loudest.

I love this country and there was a time I would take up arms to defend her but as each year passes, I become just a touch less patriotic and wonder how I will survive this mess. Should I spill my blood to save those who steer our country to the point of no return??

Awesome Job Garth – you must be completely gray by all those who write…

#337 Aggregator on 09.26.17 at 2:42 pm

Told you Garth. Ottawa will change the rules.

The best Canadian investment over the next few decades will be an immigrant spouse with a foreign bank account.

#338 MF on 09.26.17 at 2:43 pm

#298 n1tro on 09.26.17 at 12:35 pm

Do you have any better statistical model?

Does it show Canada as being a “more corrupt” or “less corrupt” country when compared to all other countries on earth?

MF

#339 IHCTD9 on 09.26.17 at 2:55 pm

#311 n1tro on 09.26.17 at 1:00 pm
#249 Jenny on 09.26.17 at 8:18 am

There are 3.6 million government employees of all levels in canada. And there are 36 million Canadians. That makes 10% of the population that are government employees. Very far from the 25% you wrote.
—————————————-
Reasoning like the above example is why Canadian children need less math and more logic courses. No point having perfect math when the premise is messed up to begin with.
____________________________

Even just a pause to double check what was actually written would have done the job.

#340 IHCTD9 on 09.26.17 at 2:58 pm

#337 Aggregator on 09.26.17 at 2:42 pm

The best Canadian investment over the next few decades will be an immigrant spouse with a foreign bank account.
_____________________________________

Something tells me that plan could backfire HUGE.

Get a Canadian Woman and learn how to offset your taxes. Even a working stiff can make a big diff trimming the fat and leaving a lot less grease in the pan for the hogs in Ottawa.

Live here, but dodge the punches. Not even all that hard to do.

#341 Millmech on 09.26.17 at 3:04 pm

It’s funny how the mind works,as long as your not losing out it’s ok to take from someone else.
The public workers are saying they’re getting a raw deal,the private workers are getting a raw deal.
The above people sound just like the doctors,so suck it up princess because once the T2 gang realize they won’t get the revenue they are expecting they’ll get it from you guys next.

#342 chopstix on 09.26.17 at 3:07 pm

greasy realturds having fake customers line up for condos…
”I Was Paid $400 to Wait in Line at a Condo Sale”
https://www.vice.com/en_ca/article/qvj3w3/i-was-paid-dollar400-to-wait-in-line-at-a-condo-sale?utm_source=vicetwitterus

#343 n1tro on 09.26.17 at 3:09 pm

#299 MF on 09.26.17 at 12:36 pm
80 n1tro on 09.26.17 at 10:36 am

Not how it works.

Accountants, doctors are at risk of automation too. That is a fight we are all facing.

This joke post was about how good the “entire” public sector has it. I proved otherwise (as have a ton of others in the comments).

Thanks for proving my point though.

MF
——————————-
You wanted to point out that not all government workers have it good as per Garth’s post. I pointed out that in your example, the government worker still is better off albeit not by much. It’s all relative.

#344 rainclouds on 09.26.17 at 3:10 pm

#207 Nitro” Realize that your defined benefit plan means it is indexed. Don’t know what that means? It means that your pension has a guaranteed return regardless of how the market is doing”

Incorrect assumption,

Suppose you have a DB plan paying 50k. Not indexed. 10 Yrs later still 50k, Inflation at 2% =20%. Not factoring the compounding.

Not indexed in private sector is quite common, Those few that still have DB plans…………..

#345 Club Fed worker on 09.26.17 at 3:13 pm

A few things worth mentioning:

1. our government is about as good as democracy – the best bad system there is. Do government-detractors think the private system would be the solution for running the country? There have been attempts, mayor Larry O’Brien in Ottawa, Trump in the US, and many more.

2. government workers have (many) had the profile to be employed by the government. Definitely not the dumbest people around, as a group. There are exceptions, but in my opinion as a group they are doing pretty well. Also, let’s keep in mind that not anyone can work for the government, and especially not in any of its institutions. Beyond studies, many government works have to obtain and maintain high levels of security clearances, credit scores, etc. Not something easy for the average Joe.

3. many government workers at the higher (management&up) levels can do much better in the private sector, and many do leave the government. Call it the revolving door, but that’s how the world goes, in Canada and elsewhere.

4. the benefits are of debatable quality when compared with good private sector ones, including insurances (the federal govt one sucks), and pensions (IMHO at a good salary one does better if the employer compensates 50% of RRSP). The ‘lifelong’ federal DB pension would be great if you somehow manage to live til you’re 150yo, but statistically we public sector workers don’t outlive the general population because we’re…fat cats.

5. it’s old-fashioned to think of Canada as ‘the world’. Job security & benefits in the Canadian federal system are at best equal to SMB (small and medium business) jobs in Europe. For instance, Germany has troubles filling over 200 thousands federal government jobs, because its people prefer working in the private sector. The issue in Canada is not that the public sector is good, but rather that conditions in the private sector are often abysmal. Working 50-60h every week while being paid for 40? Stupid.

Drawing the line…what’s the solution? Find a provable way to make Canada better and I’m fine to quit my ‘cushy’ federal indeterminate, DB-inclusive job.

#346 jess on 09.26.17 at 3:25 pm

https://www.opic.gov/
Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances U.S. foreign policy and national security priorities.
========================

rio tinto price
6969. may 16 2008 / 1049. dec 5 2008 / 3442.60 today

Freeport-McMoRan Inc price
62.09 may 16 2008 / 14.06 today

SPINNING GOLD
by Robert Bryce
Mother Jones Magazine (September/October 1996)
http://www.motherjones.com/politics/1996/09/spinning-gold/

https://www.bizjournals.com/phoenix/news/2017/08/04/which-industries-are-most-prone-to-corruption.html

http://www.aljazeera.com/indepth/opinion/2011/08/201182814172453998.html

http://www.sandiegouniontribune.com/hoy-san-diego/sdhoy-freeport-indonesia-ceo-resigns-after-latest-2016jan19-story.html

“What we’ve seen is that public pressure was very successful in influencing the Ethics Council,” he said, “and because of this public pressure they had no other option but to act.”
https://www.nytimes.com/2015/12/18/world/asia/indonesia-corruption-setya-novanto.html?mcubz=3
http://www.aljazeera.com/indepth/opinion/2011/08/201182814172453998.html
======
Grasberg. The first is that the mine discharges 230,000 tons of waste rock a day into surrounding waterways; given the escalating rate of processing, this rate is arguably above that allowed by national law. Secondly, acid rock drainage – the outflow of acidic water – has resulted from the disposal of a further 360,000 to 510,000 tons a day of overburden and waste rock in two adjacent valleys covering 4 miles (6.5 km), up to 975 feet (300 metres) deep. The mine operators dispute both claims.

Riverine methods of waste disposal are banned in every developed country on Earth. The World Bank no longer funds projects that operate this way, due to the irreversible ecological devastation, and the International Finance Corporation requires that rock be treated prior to disposal, which is not a practice carried out at Grasberg. Since the mid-1990s, a number of independent environmental assessments have found unacceptably high levels of toxicity and sediment as far as 140 miles away.

Freeport and Rio Tinto maintain that riverine tailings disposal is the best solution, given the difficult terrain, the threat of earthquakes, and heavy rainfall.
2008

…” the Norwegian government announced that it had liquidated its entire $1bn investment in Rio Tinto for “grossly unethical conduct”. Operating the second largest fund in the world, the Norwegians’ decision focused solely on the Grasberg mine in West Papua on New Guinea, which it believed posed the “unacceptable risk” of contributing to “severe environmental damage” if it were to continue funding the Anglo-Australian mining giant.

Finance Minister Kristin Halvorsen said the problems with Rio Tinto, the world’s second-largest iron ore miner, concerned a joint venture with Freeport McMoRan, a group excluded by the fund in 2006, at their Grasberg mine in Indonesia.

=
Rio Tinto owns 40 per cent of the copper and gold mine, which is operated by Freeport McMoRan, a Rio Tinto spokesman said.

“We do not want to contribute to serious environmental damage,” Ms. Halvorsen told a news conference.
Ertsberg project was an engineering marvel environmental disaster!
“The Grasberg mine discharges very large amounts of tailings directly into a natural river system; approximately 230,000 tonnes or more per day,” the finance ministry said in a statement, adding that it did not foresee any change.

===========
rio tinto price
6969. may 16 2008 / 1049. dec 5 2008 / 3442.60 today

Freeport-McMoRan Inc price
62.09 may 16 2008 / 14.06 today

#347 Chris on 09.26.17 at 3:29 pm

What bothers me most is the concept of ‘integration’ is being completely ignored. My (perhaps outdated) accounting training was that there is little difference between taking a salary (and deducting it from business income) or taking dividends (and paying corporate taxes first, then personal taxes on dividend income). Now that this is tipped out of equity, just imagine what this will do for the underground economy. Those who can ‘forget’ to register a sale and accept cash will do so with increasing fervor. Equity theory at work.

#348 Cristian on 09.26.17 at 3:30 pm

Interesting article at http://www.huffingtonpost.ca/tim-paziuk/its-only-fair-that-businesspeople-are-treated-differently-trudeau_a_23219617/?utm_hp_ref=ca-homepage
Just facts and numbers, no ideology.

#349 IHCTD9 on 09.26.17 at 3:31 pm

#92 The fourth turning on 09.25.17 at 8:33 pm
A+++ propaganda piece, Garth. Super venomous. I won’t bother deconstructing it, since you know what you did and why you wrote it this way. I’ve never seen such concentrated bile before in my life. Amazing. Targeted. Emotional.

______________________________________

I can smell the rage lol, I can hear the gnashing of teeth. Garth really drew you out of the woodwork didn’t he?

Just some advice kid – the readership here at the GF is not so emotional. We see it like it really is:

That would be a government stuffed like a can of sardines with fat, greasy, over-fed Civil servants frantically gorging themselves at the trough, their indefatigable appetites ever persisting for more and more and more, and more.

You won’t be deconstructing JACK.

#350 I pay my fair share of taxes. Whats in your wallet? on 09.26.17 at 3:34 pm

#3 JoinTheCRA on 09.25.17 at 7:05 pm

A friend of mine is a CRA auditor. They just started there a year ago after leaving public accounting. They make $90K a year, leave their work at the door when they leave at 4 PM, and have a defined benefit pension plan. They even get every second Friday off because they “work” an extra hour a day (8:30-4:30 is an extra hour). It’s hilarious.

Why should anyone work for any employer other than the government?
__________________________________________
Pretty soon your friend will be very interested in talking to @smokingman and his well hidden millions in assets. CRA can go on a hunting mission and follow his trail. Tell your friend it could be the time of his or her life.

#351 MF on 09.26.17 at 3:35 pm

3 n1tro on 09.26.17 at 3:

I misunderstood then.

You make a Good point.

MF

#352 rainclouds on 09.26.17 at 3:39 pm

Is our PM a buffoon or simply so enamoured with himself that throwing Canada under the bus at the UN is some sort of cleansing for progressives?

http://harveyoberfeld.ca/blog/

#353 45north on 09.26.17 at 3:40 pm

Mark: I’d totally be in favour of a lifetime 15 year service limit

In my case, that would have cut off my career just when I doing my best work. The civil service is hard work. There are lots of solutions that are basically 10 second sound bites which is what Bill Morneau is doing – a 10 second sound bite – “tax fairness for the middle class”.

Bubba: Right now, some public servant is reading this blog and crafting a way to shut it down and curtail free speech.

Surprisingly the civil service has survived the internet fairly well. Chain-of-command is intact. Criticism from within the ranks is muted.

Linda: Truth is, most people would rather have the cash money now, not 25 or more years down the road.

that is the truth. When I started with the civil service, 7% of my salary was taken off for my pension. “I don’t need a pension. I’m 26” I explained.

Citizen: I think the crux of the issue is the lack of reasonable, fair approach to holistically considering the changes to taxes. The push to the deadline date of October 2nd (through the summer months) is unreasonable.

very well expressed! Bill Morneau had it right – the slogan “tax fairness for middle class Canadians” was a winner. If it had come right before an election, it would have won but now the more he explains the worse it gets. People are starting to ask “what is a reasonable, fair approach to holistically considering the tax structure”. And especially they are starting to consider what approach would best contribute to our prosperity and financial security. As Garth says “he is being used up”.

mother: That said, small business owners, or any business owner, is doing something amazing. Running a business is damn near impossible, and, as we all know, most fail. So more power to the business person. Frankly successful businesses are often just a matter of luck and good timing.

very well expressed!

#354 jess on 09.26.17 at 3:41 pm

Embattled former billionaire Sam Wyly is looking to unload his ivy-covered mansion outside of Dallas for $12.5 million.

The 82-year-old businessman, investor and philanthropist, who is wrapped up in a years-long battle with the U.S. Securities and Exchange Commission over a fraud suit and was billed for billions in back taxes from the Internal Revenue Service, put the pale brick home on the market late last week.

In the fall, Mr. Wyly agreed to pay almost $200 million to the SEC to resolve a fraud suit in which he and his late brother, Charles Wyly, were accused of hiding hundreds of millions of dollars in offshore accounts while getting rich off investments in the arts and crafts store Michaels and others. The corruption charges have led the octogenarian worth an estimated $1.1 billion a decade ago to declare bankruptcy. ”

https://www.mansionglobal.com/articles/67533-bankrupt-billionaire-lists-12-5-million-dallas-mansion

#355 Johnnyboy on 09.26.17 at 3:43 pm

#291 Smoking Man on 09.26.17 at 11:35 am

What a moron. He’s about to unleash a killer plague on small biz and this is what he’s passionate about.
Total loser.

https://youtu.be/BHacFI8K6ck
…………………………………………………………………….
Who is calling the kettle black?
Sort of like the Large Fat piece of $hit running the good old US of A. Millions languish in heat, no electricity, no food or water, total destruction of infrastructure, death, disease about to set in due to sewage sludge. Yes sir and he is passionately tweeting about about taking a knee? Tell this lard ass to get his $hit together and get over himself. He has a county to run.

http://www.cnn.com/2017/09/26/us/puerto-rico-misery-and-desperation-after-hurricane-maria/index.html

http://www.independent.co.uk/news/world/americas/us-politics/donald-trump-nfl-race-row-latest-twitter-onslaught-protests-us-president-taking-the-knee-kneeling-a7967836.html

#356 Overheardyou on 09.26.17 at 3:47 pm

I think the biggest point people are missing is the difference between working for a big corporation vs a small business owner. I work for a small business in Toronto with 10 employees. Employees get CPP and EI. No top ups. No paid sick days, no overtime, no benefits. Managers work 60-70 hours a week covering for the boss.

A few of my buddies work for law and accounting firms and they get better packages. Salaried, sick days, vacation days and benefits. Plus the company pays for business travel and they can mix in some vacation time too.

I am definitely against tax evasion, but I think the better way to fix this is increase enforcement. I mean the wealthy aren’t dumb. They’ll figure something else out to avoid taxes. You catch a few, throw them in jail and fine them. See what happens.

#357 Al on 09.26.17 at 3:54 pm

Time to stand up for our rights and punt the Civil “servants”

#358 n1tro on 09.26.17 at 3:55 pm

#338 MF on 09.26.17 at 2:43 pm
#298 n1tro on 09.26.17 at 12:35 pm

Do you have any better statistical model?
————————–
I don’t but that doesn’t mean we take this weak sauce as gospel. Corruption is everywhere there are people. In 3rd world countries, it is in your face with the traffic cop hinting for some coffee money out in the open. In 1st world countries, it is liberal abuse of the tax system and its rules.

My point is, perception of corruption is evident in poorer countries as the poor (which makes a larger portion of population) are being shaken down daily. In richer countries, it is the rich (relative term here; make up less of the population) that is being shaken down thus the results does not tell us anything that isn’t common sense I would think.

#359 IHCTD9 on 09.26.17 at 3:59 pm

#106 Proud Civil Servant on 09.25.17 at 8:52 pm

…at a salary lower than what I could have gotten in the private sector.

________

Right, I’m sensing a trend here…

Let me guess, you only make 25% of what you could be making in the private sector.

All government workers are martyrs for the greater good working for cheap.

#360 n1tro on 09.26.17 at 4:01 pm

#344 rainclouds on 09.26.17 at 3:10 pm
#207 Nitro” Realize that your defined benefit plan means it is indexed. Don’t know what that means? It means that your pension has a guaranteed return regardless of how the market is doing”

Incorrect assumption,

Suppose you have a DB plan paying 50k. Not indexed. 10 Yrs later still 50k, Inflation at 2% =20%. Not factoring the compounding.

Not indexed in private sector is quite common, Those few that still have DB plans…………..
—————————-
Thanks for the clarification. But for the purpose of what Garth is referring to and the people defending that it isn’t free money, I think we can make the assumption that the DBOs in question are indexed thus the discussion around “fairness” between the 2 sectors.

#361 waiting on the westcoast on 09.26.17 at 4:32 pm

Good read on the zones in Vancouver where there truly was significant foreign investment are pushing prices lower (especially in the high end of homes)…

https://www.biv.com/article/2017/9/prime-lower-mainland-real-estate-markets-still-ree/

#362 april on 09.26.17 at 4:41 pm

Ross Kay Howestreet.com says it’s sure coming “home to roost’ for recent real estate buyers especially condo and townhouse buyers in the Lower Mainland of BC

#363 NoName on 09.26.17 at 4:46 pm

#337 Aggregator on 09.26.17 at 2:42 pm
Told you Garth. Ottawa will change the rules.

The best Canadian investment over the next few decades will be an immigrant spouse with a foreign bank account.

—-

You can scratch all from all those countries below. I dont understand why someone would “deprive” your self from such a huge variety of potential spouses, just to save buck or two… Jour best spouse is one that is smoking hot, makes more money than “you”, cooks, clean don’t complain and its borderline oseadee, regardless of place of origin.

https://www.fin.gc.ca/treaties-conventions/in_force–eng.asp

#364 Where's The Money Guido? on 09.26.17 at 4:50 pm

Re: #54 Cecil Henry on 09.25.17 at 7:53 pm
3.5 million public sector workers??

24% of all workers? This is obscene

This is just like a communist state bureaucracy!!!!

I thought it was 300,000.

This must end, the public sector must be drastically reduced. Let people consent and choose whether they pay for your ‘services’.

Make it an election promise: ‘We’ll stop stealing your money and redistributing it. Its YOUR money first’

1. Stop this ‘income tax’ theft on higher earning Canadians and reduce taxes to a flat tax. People EARN the money they get in a free society.

You’ve got it all wrong. When 50% of your money goes to taxes, it sure as f&%k ain’t free. And you thought you were free, just slurped up the overlord’s (the word for today) mantra and “freely” paid your taxes like a good lil peon.
The boys up top just wuv you. Playing Peter against Paul while they dine on caviar and lobster and count their YUGE tax free accounts at Unky Aga Khan’s private island while you pay for the trip.
Hey, isn’t that a taxable benefit? LOL..
We’re so f#%ked, and this is just the start.
Just have a look at the private prisons…..Your number is already chosen, it’s your SIN. You ain’t blood, you’re doin’ time for whatever.
https://globalnews.ca/news/3325050/justin-trudeau-aga-khan-island-trip-125k-bill/
May someone’s God have mercy on souls? Not in this life…..

#365 Smoking Man on 09.26.17 at 4:52 pm

#350 I pay my fair share of taxes. Whats in your wallet? on 09.26.17 at 3:34 pm
#3 JoinTheCRA on 09.25.17 at 7:05 pm

A friend of mine is a CRA auditor. They just started there a year ago after leaving public accounting. They make $90K a year, leave their work at the door when they leave at 4 PM, and have a defined benefit pension plan. They even get every second Friday off because they “work” an extra hour a day (8:30-4:30 is an extra hour). It’s hilarious.

Why should anyone work for any employer other than the government?
__________________________________________
Pretty soon your friend will be very interested in talking to @smokingman and his well hidden millions in assets. CRA can go on a hunting mission and follow his trail. Tell your friend it could be the time of his or her life.#350 I pay my fair share of taxes. Whats in your wallet? on 09.26.17 at 3:34 pm
#3 JoinTheCRA on 09.25.17 at 7:05 pm

A friend of mine is a CRA auditor. They just started there a year ago after leaving public accounting. They make $90K a year, leave their work at the door when they leave at 4 PM, and have a defined benefit pension plan. They even get every second Friday off because they “work” an extra hour a day (8:30-4:30 is an extra hour). It’s hilarious.

Why should anyone work for any employer other than the government?
__________________________________________
Pretty soon your friend will be very interested in talking to @smokingman and his well hidden millions in assets. CRA can go on a hunting mission and follow his trail. Tell your friend it could be the time of his or her life.
…….

Tell them to hold off for a bit, still no power after Irma. Nice beach.

#366 Smoking Man on 09.26.17 at 4:54 pm

#355 Johnnyboy on 09.26.17 at 3:43 pm
#291 Smoking Man on 09.26.17 at 11:35 am

What a moron. He’s about to unleash a killer plague on small biz and this is what he’s passionate about.
Total loser.

https://youtu.be/BHacFI8K6ck
…………………………………………………………………….
Who is calling the kettle black?
Sort of like the Large Fat piece of $hit running the good old US of A. Millions languish in heat, no electricity, no food or water, total destruction of infrastructure, death, disease about to set in due to sewage sludge. Yes sir and he is passionately tweeting about about taking a knee? Tell this lard ass to get his $hit together and get over himself. He has a county to run.

http://www.cnn.com/2017/09/26/us/puerto-rico-misery-and-desperation-after-hurricane-maria/index.html

http://www.independent.co.uk/news/world/americas/us-politics/donald-trump-nfl-race-row-latest-twitter-onslaught-protests-us-president-taking-the-knee-kneeling-a7967836.html
……

Com’on, tell the truth, 362 posts and you find mine. CTR+F SMO

You love me don’t you.

#367 Lee on 09.26.17 at 5:15 pm

Folks, let’s not forget, teachers pay about 11% of their pre-tax income into the pension plan for 35 years, or more. Even if they earn an average of $70,000 per year, they will have paid in at least $269,000.00. For most, its more. A teacher who earned $100,000 per annum in her last five years, will at 65 receive a pension of about $66,000 per year. With CPP and OAS they will be at about $87,000, with an OAS clawback of about $2,000 to $3,000 applied to that. I am sure they could manage this yearly income if they put $269,000 in their RRSP over 35 years and made even 4% per year. Most teachers may even be leaving money on the table when they die given the employer’s contribution.

#368 kommykim on 09.26.17 at 5:57 pm

RE: #288 Keith in Rio on 09.26.17 at 11:07 am
What a joke……we’ve got communism….. errrrrrrr, unions to thank for that.

Private sector employees can also thank the unions that they get weekly time off, a minimum of two weeks paid holidays, safer working conditions, etc. I guess if you are an unscrupulous employer, you wouldn’t like that…

#369 Lost...but not leased on 09.26.17 at 6:12 pm

IMHO..the Civil Service versus Private Sector matter boils down to the proverbial level playing field….

As Garth alludes to above..the Feds are “somehow” obligated to contribute $415 million annually (X’s 14 years) to the Civil Service pension fund….while extruding/extorting $250 million(est.) annually from the private sector…(aka still need another $ 170 million from”somewhere”) .

NOTE: I am not sure if T2 has rookie cards of his Dad T1
wearing T shirt of classic Che Guevarra silhouette and CAPTION “Western Canada must d*e’…. that may or may not have value…but in my humble analysis the political optics are extremely compromising..in that T2 and Moroneau are willing to not rob Peter (private sector)to pay Paul(civil service)..but literally risk killing of the golden taxpaying goose of the private sector..aka the aforementioned $215 million plucking pushes this cash cow over the brink and Canada enter a economic tailspin that it does not recover from…(Agenda 2030 ?)

Is this a risk they feel is worth it..or is the deeper agenda to facilitate and then exacerbate tensions between civil service and private sector.

NOTE: Background
For those old enough to remember…T1 invoked the War Measure Act in the “FLQ crisis” in Oct.1970 with a “watch me” attitude,….. but found a hippy chick to marry 5 months later in March 1971….. and T2 was teleported to planet Earth 9 months later ……Nanu Nanu

#370 Polymer on 09.26.17 at 6:17 pm

Great article Garth. I read that the NDP is even critical of the proposed (Not really proposed considering the language of T2) tax changes. The NDP wants the government to tax family trust funds as well, which 1% ers use and virtually nobody in middle class uses. Billy and t2 both have large trust funds

#371 JD on 09.27.17 at 10:54 am

Garth, just to clarify, did you say you have no pension? I believe you were an MP for more than 4 years in which case you qualified for an accelerated pension? It is my understanding that MP’s qualify to be fully pensioned after 10 years because of their short time in office.

As for considering incorporated individuals tax cheats? I don’t think that is the point. I got a kick out of a doctor trying to explain on CBC what they felt they are ‘entitled’ to these tax perks because they made a sacrifice to be a doctor and their spouse has to sacrifice because they are on call at 2 a.m. and as a result their spouse cannot hold a normal job. I had to laugh out loud. Oh you mean like other families that have spouses employed in such industries as say property management, or other jobs that require on call don’t make sacrifices.

Lets be clear. An incorporate individual still has tax advantages that others do not. What about the $800,000 capital gains exemption when they sell their business.

Doctors are compensated according to their education. Last I checked most specialists (surgeons) are all pulling 350K plus. Why would should they have to pay less than everyone else? And a surgeon isn’t really an entrepreneur that is hiring 15 or 20 people? It’s not like they are growing the economy.

There are true entrepreneurs who create jobs by building a business. This is not consultants, project managers, developers, or other individuals that are intentionally being hired on an hourly basis, are are incorporating for tax benefits.

It is clear, the system is broken. But that doesn’t make it right. There needs to be a new definition for what qualifies as an entrepreneur and who should be entitled to tax breaks. As it stands now, there are far too many individuals that are truly taking advantage of the system which makes employees (who don’t work for the government) feel like they are suckers.

And as for government pensions and government unions. Don’t get me started. Hopefully T2 has this in his sights as well.

As a side, I am incorporated. But I don’t receive any tax benefit because my corporation is passive not active.

And if our doctors decide to go to the USA. Wish them best of luck. Many more Canadians are moving back to Canada.

When I was an MP, it took eight years of service to qualify with no opt-out provision. My pension is in the $20k range and I have donated it since receiving it. And you? — Garth

#372 Michelle on 09.27.17 at 2:43 pm

Garth, it is not accurate to say that public sector pensions are soley paid by the government. Public sector employees contribute a significant portion of each paycheque towards their pensions. It is true that there is a defined benefit.

Instead of complaining about why public sector employees have pensions, it would be more useful to ask why private sector employees increasingly do not. It benefits no one in society if those who reach retirement age do not have the funds to support themselves and need to rely on social services, so we will all end up paying in one way or another. Policy changes are needed.

My father-in-law is still comfortably living off his defined benefit pension from IBM after retiring nearly 30 years ago. Private sector pensions once existed. Why have we allowed them to elapse without creating anything to replace them?

#373 Larry on 09.27.17 at 4:51 pm

I often wonder why the Govt doesn’t keep things simple and just impose a flat tax rate – say 20 or 25%.

This way, folks who work hard are not disincentivized with the current tax system.