The storm (part deux)

There are better ways.

Let’s follow up a little on taxes. Of course they’re too high in Canada, but get used to it. As I wrote yesterday, there’s worse ahead.

  • The HST is coming for 16 million of us in July.
  • I see no alternative to an increase in the GST rate, back to 6% or beyond within the next three years.
  • RRSPs could be fine-tuned, eliminating the carry-forward of unused room and turning the deduction into a credit (which would halve the tax break for wealthier contributors).
  • RRIF payout amounts could be accelerated, forcing retirees to deconstruct their tax shelters sooner.
  • The age for contributing to an RRSP could be dropped again to 69, maybe on its way to 65.
  • The Canada Savings Education Grant could be sliced from RESPs, or eliminated for families with incomes over $75,000.
  • TFSAs were tightened once, and that could happen again. The things are just too good.
  • The age for receiving CPP and OAS could be moved up to 67, as it has been in the US, and then as high as 70.
  • The capital gains threshold could be moved from 50% to 60%, boosting the tax take on stocks, mutual funds, gold bars and commercial real estate.
  • And speaking of property, the total tax exemption on profits made from residential real estate can be modified. A modest tax of 20% or 25% would help cool speculation, after all.

Any of these things are on the table. Some of them will likely happen. Not immediately, of course (except for the HST grab), but over the next three to five years I fully expect there to be ‘emergency’ and ‘temporary’ revenue-raising measures put into place by a federal government sinking fast.

After all, what are the options? The deficit three years ago was zero. Now it’s $56 billion. The national debt five years was sinking. Now it’s surging. The independent Parliamentary Budget Officer is forecasting massive deficits for the next decade, and in five years the number of people with their hands out for public pensions goes through the roof. Virtually every province is in hock. So where’s the money going to come from?

Taxing employment income is a non-starter since that trashes disposable income, hurts an economy which is 60% dependent on consumers and kills jobs. That’s why taxing real estate and retired people, for example, is far more convenient. And taxing consumption rather than wages is much easier politically. Once a sales tax is in place, the thing turns into a money machine.

If you’re not working at legal tax avoidance, you’re not paying attention.

More Canadians should stop flailing around seeking silver bullets (Yaletown condos, gold bars, 3xETFs) and look over their shoulders.

It’s gaining on ya.


#1 The Coming Depression on 12.03.09 at 9:48 pm

More so you should buy as MUCH of GOLD as you can muster. Ignore this bad piece of advice! Peter Schiff: Gold is going to $5000, believe him.

How’s that depression working out for you? — Garth

#2 TaxHaven on 12.03.09 at 9:53 pm

I voted with my feet 20 years ago…took my money and RAN. I have no wish to be funding pensions or huge salaries for government employees, the military as a social program in much of the country, schooling for the children of others, or unneeded and unaffordable new construction projects. Nor do I wish to be taxed through devaluation or inflation to pay for the near-zero-rate today’s home’buyers’ salivate over.

Canadians simply have to wake up and decide whether, long-term, government is their friend or their opponent. Unfortunately, too many now are (very temporarily!) getting more in funds and ‘services’ from governments than they ever are required to pay in taxes.

If I return my funds and investments will not follow me. Nor will they leave an electronic footprint or be traceable. I will live extraordinarily frugally, below the radar. I will pay cash for my property. I will operate in cash. I will keep my gold, outside the country. I will not co-operate with the surveillance society.

I will obviously NOT be a good consumer.

My parents’ generation trusted ‘professionals.’ Their neighbourhood policeman, pharmacist, doctor, accountant. That nice mutual fund representative, helping them build their retirement nest-egg… They believed government was there for them and was an impartial arbiter in society, a guarantor that life would never change, that Canadians never need face challenges or go without.

Canadians like to scoff at gun-owning, big-government-distrusting Americans. Some airy-fairy nonsense called “Canadian Values”(TM). But it is now high time Canadians woke up too.

I’ve always liked “People should not be afraid of their governments; governments should be afraid of their people!”

#3 asp on 12.03.09 at 10:03 pm

Canada needs smarter taxes, not blind adherence to the ideology that all taxes are bad taxes. Most taxes are simply insurance fees for commonly used services and are the most economically efficient way to pay for those types of services (education, healthcare, etc.). No modern economic system can survive without most activities being insured.

Smart “taxes” mean that the government can make up 30% of the economy while still letting the market excel at the things it is good at. There are many things in life a market economy does not do well. Where there is market failure, we have the opportunity to do things better through “taxes”. And through democracy, we have the tools to keep governments responsible.

#4 LTR,FTW on 12.03.09 at 10:06 pm

You’ve missed at least one other option. Tax evasion !
I’ve lived in at least a half a dozen basement suites (“Mortgage Helpers”) that I know for sure that the Rent was not declared as income for the slum-lord. What about those self employed business owners that can write-off family meals, gas receipts etc as a business expense. It may not seem like much when taken in isolation but across the country it can sure add up.
Just look at grow-ops. You can’t tell me there is a demand for Hydroponic Tomatoes to justify thousands of dollars of equipment and supplies. And when the unemployed farmer gets caught, he gets a small fine and off he goes in his Hummer to the Cabin at the lake to enjoy all of his tax free gains.
As an hourly paid employee, there is not much I can claim back on my taxes. When I used to pull wrenches for a living, I couldn’t even write-off my tools !
It’s about time everyone paid their fair share of taxes and crime shouldn’t pay ….. but it does!

#5 ontheshoreline on 12.03.09 at 10:09 pm

legal tax avoidance…I can see a big jump in the illegal tax avoidance….talk about a black market.working for cash,. like I see people doing already.

#6 peter on 12.03.09 at 10:10 pm

Tory Times are hard Times. Always have and always will be.

Good job CON voters

#7 Sean on 12.03.09 at 10:27 pm

Garth, you are focusing on revenue raising measures, tax hikes. Government could try to shrink itself by chopping civil servants, gouging their pensions and entitlements and in general bring their total compensation more in line with the private sector. Is any of this likely to happen?

It would be symbolic only. Not substantive. — Garth

#8 Pitaking on 12.03.09 at 10:38 pm

Along Garth’s recent posts about huge Gov debt, Alberta Health announced they are borrowing 220 million to cover a deficit that will hit 1.24 BILLION by year end, not including 100-150 million spent on H1n1. Steady Eddie continues to lead Alberta off the cliff and as the monster amount of fed stimulus money comes to end along with what looks like mass layoffs in the nat gas industry, 2010 will not be Alberta’s year.

#9 jimmy on 12.03.09 at 10:44 pm


I agree with you that taxes must be increased to reduce future deficits, but will it not be political suicide for the goverment of the day to significantly increase taxes/reduce benefits for pensioners since they are now a big (and soon to be bigger) percentage of voters?

#10 Gonzo on 12.03.09 at 10:52 pm

Oh no! Home prices set to soar in 2010!

#11 Onemorething on 12.03.09 at 10:54 pm

You would think Smart Boomers will cash out at the height in RE selling at the top, turn around and rent a nice property (same as retired people do in empty nest retirement communities or retirement homes). Pocket all the cash and look at ways to capitalize on dividends that can will keep you flush on all expenses.

My parents in their 80’s have been doing this since my dad retired when he was 60. No debt since 1954, savings and investements for 35 years, retired. SUPER FLUSH SUPER PLUSH! This is what growing up in the depression will teach you eventually. They cant wait for high interest rates to earn more!

Problem is even smart boomers will step down slowly, they cant help themselves, pride in ownership, working hard or hardly in some cases gives them the nuts to think they deserve it.

Mr. & Mrs Jones will sell that $1M McMansion, step down to a $500K Townhome, put the $500K in their pocket but watch it be drained by the soon to be reset in RE where that $500K will be $300K or worse.

Now throw in the above taxes and possible changes going forward Garth has pointed out and you will soon be forced to take the escalator down for the remainder of your life.

Onemorething, the perfect play is not only cash out but “Take Off, from the Great White North!”, I did that almost 10 years ago, it’s a real sweet deal!

#12 Kevin Smyth on 12.03.09 at 11:04 pm

In Phoenix for the first time. Golf course packed yesterday and today at $150 a loop. Restaurants packed. Football game sold out but Coyotes tickets are cheap, cheap, cheap. Not sure what to think of things? How can all these people still be living it up? The vehicles are unbelievable. Mercedes, BMW etc, etc.

#13 $fromA$ia ( Y ) on 12.03.09 at 11:16 pm

How’s that depression working out for you? — Garth

I fully expect an inflationary depression. Have you seen the cost of food rise lately? I fully expect inflation.

#14 nonplused on 12.03.09 at 11:30 pm

Nobody has anything left out here to tax! We’re broke, dang it!

#15 Andrew toronto on 12.03.09 at 11:34 pm

Garth what do you mean by tigtened once and could happen again?

TFSAs were tightened once, and that could happen again. The things are just too good.

#16 Schroedinger's Bull on 12.03.09 at 11:34 pm


Then start a business. There’s nothing illegal about starting a legitimate small business from your home, even if it loses money, and then writing those losses off against your personal income. The Tax Court has set precedents that basically tell the CRA that their business is NOT to tell you how to run your business, but simply to assess whether a real business exists. I run a business out of my home. I write off a portion of my rent, utilities, some of my meals are 50% deductible (if I can justify them), and I can capitalize and then deduct CCA on some of the assets that I employ in my business, like my computer equipment, for example.

You can write off a portion of your mortgage interest if you have one…your property taxes, your home insurance, etc.

I don’t recommend writing off any of your mortgage payments, though you can if you want to, but it will be subject to tax when you sell the home, which kind of defeats the purpose.

I declare the minimal income (actually a net loss currently) that I currently pull in from this business, and because it isn’t a corporation, I can take my net losses and deduct them from my personal income that I earn as an employed individual.

I intend to eventually make a profit, but my particular business is such that there are significant barriers to entry that will preclude me from making any significant profit for several years.

If you aren’t structuring your personal tax situation to take advantage of the many potential deductions and credits offered to you, who’s at fault?

To those of you who haven’t ever bothered to crack a tax guide, I’d like to paraphrase what I’ve learned in various tax courses. You could probably find very similar definitions on the CRA’s website, and you can definitely find them in the Income Tax Act definitions.

“Avoidance” – Legal structuring of your affairs to minimize taxation. Perfectly acceptable, though hardly encouraged by the CRA. It’s up to YOU to figure out how to do it, but there’s nothing wrong with it at all. Ask any accountant.

“Evasion” – Illegal, defrauding the CRA through deliberate omission or alteration of financial information…

The first is perfectly acceptable, and fairly easy to accomplish with a little foresight and some rudimentary reading. The second will get you fined, or jailed.

#17 gold bugger on 12.03.09 at 11:43 pm

asp wrote: “Canada needs smarter taxes, not blind adherence to the ideology that all taxes are bad taxes. Most taxes are simply insurance fees for commonly used services and are the most economically efficient way to pay for those types of services (education, healthcare, etc.). No modern economic system can survive without most activities being insured.”

asp, of all your eco-nincompoopery, this one is your gold medal contribution.

Canada needs LOWER taxes, not more. Taxes are NOT insurance fees for commonly used services, they are involuntary extractions from productive work to pay for things that are better provided by the private sector in a free market.

Columns such as this are all well and good, but where are the solutions?

I’ll offer one: On tax day, don’t file.

If everyone did not file a tax return, the government would grind to a halt. The following year, when everyone failed to file again, government would be in collapse without an emergency measure to physically steal money from people (moreso than currently happens with the Milton Friedman-created payroll deduction scheme).

At that point, the revolution begins.

First guys lined up against the wall: people who think the only way is the government-funded way.

#18 omg on 12.03.09 at 11:46 pm

#6 Peter – can’t wait to have Bob Rae as Prime Minister, eh?

#19 InvestorsFriend on 12.04.09 at 12:08 am

Stop the RRSP Tax Deduction? raise Taxes?

I have benefited quite nicely from the RRSP dedecution.

But it’s not a fair deduction really…
Rich benefit most…

Why not chop out this deduction and a ton of others and go to a simpler tax system?

Not quite flat tax because we don’t want to tax the poor.

And yes raise the GST, tax consumption.

If as Garth says we need to pay our share of taxes then it’s hard for those with money to be against a tax hike at this time.

No one likes to admit it but taxes are down a LOT in the last 20 years…

Corporate taxes (federal plus provincial) were around 46% in 1990 , now they are 30% and way lower than in the U.S.

Remember, one thing worse than having to pay a lot of taxes is NOT having to pay a lot of taxes…

I hope to pay a huge amount of taxes in my lifetime…

#20 kitchener1 on 12.04.09 at 12:48 am

I disagree about taxing the boomers, aint never going to happen, raising the retirement age to 67. NEVER in this country.

That would pretty much guarantee whatever party is in power at the time a 10 year stint as the opposition when the election after that is called. Boomers are untouchable.

The tax burden is going to be passed on to us, the 20-50 year olds.

The scary thing is that almost all cities are running a deficit as are most provinces.

Two things can happen:
1. we get taxed to death and then people really start going underground and the black market cash side business starts booming. Very big risk for the gov’t, they tried that by taxing smokes and it got them nowhere.

2. We get used to evey expanding defecits just like the US does now.

Its going to be a matter of choice and weither or not all Canadians are going to decide have their standard of living declined or are going to keep the status quo and give keynesian economics a shot. LOL

#21 AxeHead on 12.04.09 at 12:55 am

Another reason to dump your trophy house. Municipal taxes are based on mill rates and the value of your house. As your house value drops, the mill rates rise to make up for the loss. Almost all municipal employees are unionized and are not about to take wage cuts without a fight. When provincial and federal debts restrict shared project funding…how will all those new arena’s and fitness centers funded by your tax dollars be maintained without an increase in taxes. That’s it, I’m downsizing…or better yet…moving to the county.

#22 Crash on 12.04.09 at 12:58 am

Coprorate welfare has cost Canada 200 billion dollars over the last 13 years. It would be nice to see businesses in this country pay their full share of taxes.

#23 just_a_normal_guy on 12.04.09 at 1:01 am

Hi Guys,
There are other ways thru’ which the Govt. can generate more revenue instead of just tax increases. Here are my thoughts:

-legalize marijuana
-legalize prostitution
-open casinos
-introduce toll roads everywhere
-push the “eco-friendly” concept bit too much so that people feel ‘immoral’ to drive their car. so many decide to stop driving, which will be aided by higher gas prices anyways. Just make all the traffic fines three times or more. If they just don’t use their car, each family might be saving atleast 500$/month considering depreciation+fuel. That much money is available as disposable income.
-don’t be surprised to see advertisements in the tickets you buy in public transit. Soon you will get used to the blaring of advertisements in subway, buses etc
-why does government need big parking lots or buildings in prime areas of the city? They might just sell it.
-why does government wants to spend thousands of dollars for doing medical operations here in Canada? They might just think of arranging special flights for transporting patients to other countries where they can do the same operation there for just 1/10th of the price in many instances. Patients can always be given an option: Do you want to do the same operation here in Canada after 3 years or you just want to get the flight day after tomorrow to do the operation overseas?
Hopefully that would reduce the healthcare spending that many are worried about.
-Immediate slash in the amount of pension drawn by Canadian citizens staying permanently overseas.
-Just relax rules in Schools so that soft drinks and junk food from fast food chains is made available to ALL the students. That will take care of the budget in schools.
-if govt still needs more money, just make buying long term government bonds tax deductible/give tax credit.
-To keep the real estate sizzling, (whenever needed) just allow people to access their RRSP towards downpayment irrespective of whether they are first time home buyers or not. Remove the cap on what amount you can withdraw from your RRSP provided you buy a house. You spend your money the government intended way. (That for sure will not stop me from buying a real estate :). By the way, Iam one of the guys like many who strongly believes in Garth’s take on Real Estate.)

My point is – It might be possible for the government to think of more ways than just_a_normal_guy to generate money without hurting a LOT of people with additional taxes.

#24 Adam on 12.04.09 at 1:05 am

All taxes are bad for the economy.

I think Garth is conservative in his scary tax scenarios. There is, however, another way to solve the debt problem: print more money.

The Weimar Republic tried that approach. I have in front of me a Zehn Millionen Mark. Hyper-inflation ain’t pretty, folks. Let’s pray we’re not the next Zimbabwe.

A third approach to the debt problem is to cut back the size of government. Unfortunately, the best approach is unlikely to occur. Politicians and their ‘services’ are like drug dealers and heroin. No politician has the guts to wean the public off the trough.

#25 Devil's Advocate on 12.04.09 at 1:11 am

What I have seen happening in the market is not so much that the markets are surging. When the economy stalled late last year buyers withdrew from the market. They did so in large part in price rejection. Sellers on the other hand retained their lofty expectations. There was a great discord between buyer willingness and seller expectation. Eventually, sellers began to cave and reduce their prices but it took so long that there was a great pent up buyer demand. That buyers started entering the market again was not so much indication of the end of economic bad times as it was an opening of but one of many floodgates such that the flood of buyers, which really was not that great, appeared to indicate a turn in the market.

To forecast next year based on the performance this year over its predecessor is a foolish game. These are non-linear events in the market and do not make for reliable data upon which to forecast what we ought to expect next year.

I think many are going to be disappointed next year when things do not improve as they might expect or are being led to believe. As it has been said “Statistics are like a bikini… they too often show you what is interesting but not what is important”

#26 Devil's Advocate on 12.04.09 at 1:17 am

On the HST… why would any business person make a significant capital purchase today when if they wait until the introduction of the HST not only will they be able to claim the GST (5%) paid on items used to earn an income but then also the PST (7.0% in BC)?

Why do you think business supports the introduction of the HST? Because it will benefit you? Get real. Do you think they will pass the savings on to you? Get real. The only reason business supports the introduction of the HST is that they will then be eligible for PST input credits as they are now for GST input credits.

Garth is correct when he warns you of increasing taxes. You ain’t seen nothin’ yet!

#27 TheTruth on 12.04.09 at 1:18 am

As I’ve stated in this blog many times before, house prices will rise. Today, China’s leader approved Canada as a preferred destination country for its citizens. Also, in a separate report, China will have 100,000,000 outbound tourists per annum in 10 years time. Some visiting Canada will pick up houses mosly in Vancouver and Toronto.

As is the case in India and China, land prices (and houses) are not tied to yearly incomes…they are tied to family wealth. You have the landlord/wealthy class and then the working class and finally the poor. That is what’s happening in Canada. Eventhough Garth disagrees with me, please educate yourself with regards to Globalization and how Canada will become.

#28 raj on 12.04.09 at 1:30 am

I understand we will be taxed to death. I do not think real estate will crash. I think that people will be able to refinance their home to get the equity out.

I own a detached home with a legal basement apartment i rent out. My house currently is worth 450 and i have a mortgage of 300. I have income from the basement of 1100 and my mortgage payments are 1250

I live cheaper than rent and i think its stupid to pay someone elses mortgage. Lots of ways to buy a house but be careful to get one with a bit of income.

#29 Nathan in Edmonton on 12.04.09 at 1:32 am

Alberta Health Services just got a 220 million dollar loan — if heart disease is the number one health issue, why is there no Big Mac, Whopper, or Baconator tax?

#30 Nostradamus Le Mad Vlad on 12.04.09 at 1:41 am

The storm happening presently is only flurries compared to the major dump next year (a few weeks’ time).

As for the HST, Gordon Campbell is banking on voters’ forgetfulness, which is probably why the Liberals will be re-elected again.
Went to a Christmas bash at our CFP Thursday. Said our RRSPs (six Cdn. equity mutual funds) increased 17% y-o-y. They were set up as DRIPs (Dividend Reinvestment Plans), so it should be a half-decent retirement plan. Figures gold will settle around US$1500, but silver is way better.

The Cycle Of Nines. It appears that 2009 is only a pretext for stuff which will happen shortly (see headings). Part of para. from first link is interesting (follows). Goin’ down — 1 / 2 / 3 / 4 / 5

“. . . that the FDIC not only is $8.2 billion in the hole, but they have secretly borrowed an additional $80 billion from the Treasury. We have also been told that the FDIC is lying about the banks in trouble. The number in eminent danger [are not 552, but a massive 2,035.] The cost of bailing these banks out would be $800 billion to $1 trillion. That means 2,500 could be closed in 2010. Now get this, the FDIC is going to be collapsed before the end of 2010, which means no more deposit insurance. This follows the 9/18/09 end of government guarantees on money market funds. Both will force deposits into US government bonds and agency bonds in an attempt to save the system.”
Humanity has made great strides in mind-melds — Not Really Mind Control
Main reason I don’t use Yahoo – Google anymore. Instead, AltaVista, or
A Short Speech (1:23) on the reality of CC.

#31 ruraldude on 12.04.09 at 1:56 am

Thanks Garth!
Thats all those asses need is some more ideas on how to rape the masses.

#32 TaxHaven on 12.04.09 at 4:02 am

#3 ASP,

The governments do not “make up” 30% of the economy: they suck 30% out of it. Government by itself can never generate revenue…all it does is remove it from the productive economy – and then give it to the unproductive.

#33 grumpy on 12.04.09 at 5:16 am

Look over my shoulder Garth? Do you mean leaving Canada behind? I am currently living in a high tax region (Euro-Scan) but….much more return comes back in terms of services. And…….taxes are stable because the governments spending is well in control and not expanding exponentially as is the case in Canada.

I buy gold to protect myself from mismanagement and diversification not out of fear. I have owned gold since 2001 and bullion was sub 300. It is now 1200, you have to change with the times and not sit still so that the gove can screw you. Unfortunealy for the CDN seniors it is too late.

#34 Garthhasgonetoofar on 12.04.09 at 5:58 am

Garth, I like you buddy, but this is too much. All you’ve done is spread a lot of FUD. I understand that you are trying to make a point, but everything you wrote is just to sound scary. Some of it isn’t even plausible.

HST – of course.

Increase in GST – of course.

RRSP – no chance.. TFSA is already too attractive, don’t want to drive more to it.

RRIF payouts – no.. they need RRIFs to stand in the gap for CPP.

RRSP age limit – also no.. they want you to keep your money in so it gets taxed faster on its way out.

CESG – possible, but unlikely.. it’s too much political suicide.

TFSA – yes.. but your facts are wrong. TFSA wasn’t “tightened,” just corrected. Nevertheless, it IS too good. Yet, that makes it perfect for expansionary policy.

CPP – no brainer.. CPP can’t afford to pay as it is.

Capital gains – possible.. it used to be 67% and 75%. But this would be a contractionary policy at the wrong time. I’ve seen stupider, though.

Residential real estate – non-starter.. they like hot real estate, as this is the only thing keeping the economy in the black. Once it crashes, however, there won’t be any gains to tax.

Perhaps your time on the hill has given you some insight that we don’t have, but overall I get the feeling that you’re just going for shock value rather than for wisdom. This isn’t the worst it’s been, deficit-wise, and we still saw expansionary policy during those worse times.

#35 Joe on 12.04.09 at 6:46 am

Your GST increase suggestion is apparently wrong as I saw an article quoting DBRS saying that it will have to increased to 9% to help with the deficit.

I think that with your RRSP changes more retirees will exhaust they funds sooner and be fully on govt. support.

#36 bob on 12.04.09 at 7:18 am

this is about the only site that seems to talk about real canadian issues. i no longer trust main stream media to tell the truth about what is really happening.
harper and his gang will do anything to stay in power. printing money is carney’s game with the torys cheering him on. ordinary people will pay , not carney and harper. o canada.

#37 NOBODY on 12.04.09 at 7:27 am

Who cares about our debt?
Russia defaulted on its own debt in1998.
They’re doing good now!

#38 David Bakody on 12.04.09 at 7:37 am

A bunch of years ago Trudeau & Co floated American style mortgages where interest was tax deductible until people found out that when they sold their home it was now taxable.

Also a few years ago I attended a RRSP gig and I asked if the government wanted their hands on all that cash early and would move the compulsory withdrawal date to age 65 from 70, he said yes, they want that money but they feel Canadians need two years to adjust to retirement so 67 is most likely at some point.

There is a load noise coming and y’all best stand clear of the train tracks because this train is full of government tax cars waiting to be dumped on Canadians one two or even three at a time not just by Ottawa who has caused flow down taxation on the provinces coupled with Ottawa funding Afghanistan and much more.

The sad news it is all our fault….. we had money in bank and a emergency fund and were living quite well with the GST ….. so be careful what you ask for you just might get it and more …. and the more is coming big time from the Man who’s name we can not mention.

#39 Herb on 12.04.09 at 8:08 am

#18 omg,

“… can’t wait to have Bob Rae as Prime Minister, eh?”

Yes. Imagine a PM who, in an economic crisis, would speak the truth, cut expenditures and raise taxes, instead of putting on a fuzzy blue sweater, smile sweetly, lie through his teeth, then do all of the above a few years too late!

#40 pbrasseur on 12.04.09 at 8:10 am

Tax Tax Tax, as is it were going to solve anything.

The more you tax the more you’ll slow the economy and you’ll soon be back to square one (in term of debt/GDP), except poorer. Not to mention that such tax grad would drive many wealthy (and not so wealthy) pleople out of the country. I could be one of them, I can’t evade taxes but I could certainely flee them!

How about living within our means for a change?

#41 kw on 12.04.09 at 8:34 am

As I read this blog I get more angree by the minute. The is reporting record profits at the banks again, and at the same time saying how hard this recession is on the 20 somethings. We have a “20 something” who has no job but gets scammed by the bank with a monthly service fee for not having the minimum $1000 in his account. Talk about a wealth transfer before the young even get started in life. How about the banks preying on the young people with easy credit? Our daughter in university is no doubt maxed on her credit card. I have no idea even what her limit is, but I do know the bank is raising it as they please.
As the white collar fraud and corruption carries on in this country, the police harass the small time “20 something” who is without a doubt “too lazy to work”. When will a true leader make a stand against the special interest groups and “think tanks” and committees who influence all decisions made today in this sick society? Every time you look today somewhere there is a new law that restricts your freedom (eg for your safety- bicycle helmets) to laws designed to rob you of your hard earned savings.
How can anyone tax plan efficiently when the rules are constantly being revised to screw the middle class?
We voluntarily slid into poverty over the past ten years as it was no longer possible for a lower middle class person to stay above water. We have not paid any taxes over this period as we have not worked and have survived on a combination of savings from previous frugal years and capital gains/ dividends etc. Our thinking has been that food on the table and a warm and loving home are first and foremost. There has not been any disposable income so to speak. Personally I pay no attention to TV advertisements and we have no TV as of last year. We will buy as little corporate products as possible and we have used credit wisely and have never paid a penny in interest. We have not had any luck convincing our kids about money and the false economy. We read Garths books through the years and have tried to prepare for the inevitable. Granted our timing has not been great recently as a failure to jump into the markets in Mar. has made me bitter as of late. I wait impatiently for this crash.
Our firewood is cut, split and piled and we are looking into buying our seeds for the coming years. (how exciting) After all, if you are not in the loop you cannot get a decent job in this country.
I would love to be working at something productive. But I so far have refused to work for half the previous wages of my career job lost in ’93 because of free-trade. Always seemed to be in the wrong place and the wrong time since.

#42 steven rowlandson on 12.04.09 at 8:39 am

Hello Garth.
I see people are still bashing gold, silver and flailing agains taxation ect. The whole debate solves nothing and permits the continuation of the problem.
First of all taxation is a filthy business as is democracy and communism. We can do with out it.
That leaves the question of how to fund government?
The solution is obvious. Create 5 trillion dollars and pay off the federal and provincial debt and invest the balance in blue chip stocks, preferred shares, corperate bonds and good quality mortgages if any and do it through the Canadian Banks. The income stream from such investments can fund the federal government. Leave the provinces to their own devices.
As for Federal spending. Limit that to 2/3rds of income from the investments and reinvest the difference to make even more money. All that is required after that is for every one to mind their own business and pay their bills. Government must cut back on tasks and obligations and operate with in the parameters of the old BNA act which called for very limited government.
Such a scheme could continue for a very long time if carefully followed.
If there is a responsible, moral and conservative approach to the problem I think that is it.

Steven Rowlandson

#43 Devil's Advocate on 12.04.09 at 8:41 am

Uprising lyrics
Release Date: August 4, 2009
Album: The Uprising
Artist: Muse

The paranoia is in bloom,
The PR, the transmissions, will resume,
They’ll try to push drugs to keep us all dumbed down,
And hope that we will never see the truth around,

Another promise, another scene,Another package to keep us trapped in greed,
With all the green belts wrapped around our minds,
And endless red tape to keep the truth confined,

They will not force us,
They will stop degrading us,
They will not control us,
And we will be victorious!


Interchanging mind-control,
Come, let the revolution take its toll,
If you could flick a switch and open your third eye,
You’d see that we should never be afraid to die,

Rise up and take the power back,
It’s time that the fat cats had a heart attack,
You know that their time’s coming to an end,
We have to unify and watch our flag ascend!

They will not force us,
They will stop degrading us,
They will not control us,
And we will be victorious!


They will not force us,
They will stop degrading us,
They will not control us,
And we will be victorious!

#44 infernalmachine on 12.04.09 at 8:42 am

#7 Sean
I’d like to point out that if public sector compensation was put ‘more in line with the private sector’ that we’d pay FAR more in executive salaries than we do right now. deputy ministers – in effect CEOs, make around $250K (some like finance and health pull in more due to their huge portfolios). this is a far cry from the CEO of say, rogers, who likely makes $250K in a month or less.

plus what’s with everyone and their ‘race to the bottom’? why not demand that employers start paying living wages to employees rather than siphoning all that wealth up to the top 2%?

#45 weston on 12.04.09 at 9:15 am


Are you prepared to eat mega crow on the economy?

One month’s numbers don’t change much, but I’m happy for all those who have found work. — Garth

#46 Michael Beetham on 12.04.09 at 9:19 am

Re; #4 You’ve missed at least one other option. Tax evasion !
I know of one particular province where the art of screwing the Government is a national pastime. It`s the old you can`t get blood out of a stone principal. There is a table so large that the whole population is under it ! The Government threatens retaliation but is powerless . All it can do is whine for more equalization from the rest of us sheeple.

#47 PeckedToDeathByDucks on 12.04.09 at 9:33 am

Outstanding, surprising, stupendous job numbers today. Just in time for Christmas to put everyone into good buying spirits. There really is a Santa Claus.

#48 The VULTURE on 12.04.09 at 9:36 am


“Toronto woman to get $110,000 a month in spousal support

Record-setting ruling reflects fact that divorce decisions have not kept up with the times, lawyer says.”

A 61-year-old Toronto woman whose marriage fell apart after 33 years has won a record-setting spousal support award of $110,000 a month.

The extraordinary award – which also included two years of retroactive support at $140,000 a month – was based on the length of Carol Ann Elgner’s marriage to Claude Elgner, coupled with Mr. Elgner’s annual income of $3-million to $4-million.


(Globe and Mail December 4, 2009)

Tiger’s new prenup? Try renup

“Time to renegotiate that contract, Tiger. And we’re not talking about your sponsors.

Tiger Woods’s “transgressions” offered the perfect tee up for tweaks to his prenuptial agreement, blogs buzzed yesterday. His wife Elin Nordegren has been handed $5-million (U.S.) to stay for now and could get $55-million for staying at least two years, the Daily Beast reported.

Looks like that prenup wasn’t so airtight. But few are, says Stephen Grant, a family lawyer with McCarthy Tétrault in Toronto. “Everybody’s free to renegotiate. It’s rare, but you certainly do see renegotiations from time to time.”

A prenup, or marriage contract, as they’re called in Canada, can be toyed with so long as both parties agree to the process, he says (that’s often included in the original contract). Changes are most often made when a person’s financial value changes.

Some couples plan renegotiations, says Steven Benmor, a Toronto-based certified specialist in family law. “People sign prenups … not knowing if they’re going to be together for more than a year. What if they’re actually together for 30 years?”

If Mr. Woods and Ms. Nordegren lived in Ontario, he says, a court could set aside a marital contract if one party didn’t understand it when he or she signed, if one party failed to disclose major assets, debt or liabilities, or if the contract was entered under duress or undue influence. Family laws are similar across the country.

When it comes down to it, Mr. Grant says, renegotiations are rarer than the star golfer’s fumbles on the fairway.

“If the marriage ends in separation, you see [the prenup]. If it doesn’t, then you never hear about it.”

(Globe and Mail December 4, 2009)

Finance common sense boys – class dismissed.

#49 Farmer on 12.04.09 at 10:00 am

Whoooooaa Boys… I have never seen this blog with so much commonsense demonstrated before the wingnuts jumped in. Apart from 1. 16. and of course Nostra.. there is much good discusion and advice here. As a product of the depression I learned to fly under the radar (legally) in the early eighties. Be prudent, stay the course, and buy some ALR land. Live well and enjoy.

#50 pjwlk on 12.04.09 at 10:02 am

An excellent synopsis regarding the fragile condition the entire globe is really in right now.
“Should a bankrupt country (the US) be allowed to use money created out of thin air to pay for goods produced with the sweat and tears of hardworking citizens of exporting countries?”

#51 Farmer on 12.04.09 at 10:03 am

Make that 1 and 17. for the wingnuts

#52 Oakville Owner on 12.04.09 at 10:04 am

“If you cant beat them, join them.”

Has anyone on this site gone into a municipal building. Probably the happiest bunch of people you will meet. Good saleries and benifits and mostly good job security. They all pay their fare share of taxes and contribute to the economy by spending. The vast majority are doing an honest days work for their pay as well.

Before you complain about the public workers why not look into the current opportunities. Here a a few.

-Law enforcement
-Fire Dept
-Town planning
-Social worker (ONT Works)

#53 $fromA$ia ( Y ) on 12.04.09 at 10:13 am

Herb on 12.04.09 at 8:08 am #18 omg,

“… can’t wait to have Bob Rae as Prime Minister, eh?”

“Yes. Imagine a PM who, in an economic crisis, would speak the truth, cut expenditures and raise taxes, instead of putting on a fuzzy blue sweater, smile sweetly, lie through his teeth, then do all of the above a few years too late!”


Herb, you forget this is the Prime Minister that shut down Government when we needed action the most.

And he says that Ignatiav is only in it for himself?

Takes one to know one, eh Harp?

Don’t forget “the Turd”, he takes the cake.

#54 $fromA$ia ( o Y o ) on 12.04.09 at 10:19 am

45 weston on 12.04.09 at 9:15 am Garth,

Are you prepared to eat mega crow on the economy?

One month’s numbers don’t change much, but I’m happy for all those who have found work. — Garth

Ya, the numbers include people that took part time jobs and or began self employment through EI education.

Again, you only know what the government tells you.

Schiff is right, you can add 5% to the unempolyment perentage for those that chose part time work…

They spin the numbers for EI and they spin the numbers with CPI. They don’t take taxes of income tax Garth because that would really effect the home owners that are putting 75% of their paycheck against the mortgage.

#55 Stretch from yonder on 12.04.09 at 10:28 am

Bob Rae as PM??? A person who tells the truth in hard times?? Please review history!!! His government kept two sets of books on Ontario finances back in the 1990s. But when its government its not a fraud right! He said GM was too big to ever fail, therefore allowing them to defer pension payments in the 90s. Because of that decision, we tax payers had to give GM 10 Billion to cover this shortfall.

#56 Toronto C9 Renter on 12.04.09 at 10:28 am

#41 kw on 12.04.09 at 8:34 am

Very honest & heartfelt post. Stay positive and your luck will inevitably improve. Kudo’s for your kids getting through university

#57 Jeff Smith on 12.04.09 at 10:34 am

>#10 Gonzo on 12.03.09 at 10:52 pm
>Oh no! Home prices set to soar in 2010!

Ahem! And at the bottom it says “Source: CREA, Local real estate boards, RE/MAX”. Right from the turds mouth itself.

#58 Mr. D - Ottawa on 12.04.09 at 10:36 am

Reply to #15
“Garth what do you mean by tigtened once and could happen again?”

Recently the government proposed amendments to the Income Tax Act to strengthen the rules applicable to TFSA’s. Some investors were making deliberate overcontributions to the TFSA. They did this because the penalty they had to pay for this was less than the tax free gains they were getting.

If you log into your online brokerage account regularily, you should have seen the news flash in October. There’s more to it, but you can refer to these links for more details:

The Honourable Jim Flaherty, Minister of Finance, today proposed amendments to the Income Tax Act to strengthen the rules applicable to Tax-Free Savings Accounts (TFSAs).

#59 BigAl (Original) on 12.04.09 at 10:38 am

The media today is trumpeting the jobs data, all declaring ‘the recession’ over.

I still don’t understand this. These people never admitted to a recession in the first place. All the news since last year has been painted rosy. Again, when there’s bad news, they won’t call it a recession, they make a small story and then try and bury it, and they shine a positive light on it. When there’s good news, they say ‘the recession’ is over and plaster it all over the place endlessly repeating it, talking about it.

This is just the natural extension for all the phony positivity demanded in our western world. It is crippling our creativity and productivity. In our boardrooms we cannot say anything negative, we cannot suggest change – that’s negative. Everything must be a positive. I saw a show where an owner of a chinese factory was in a meeting with his execs, calling them stupid, approving some ideas, and outright dismissing others. He said “I don’t know why I pay you people – your work this week has been useless to me – now get the hell out of here and make some changes”.

Octavio Paz put it best:

“The North American system only wants to consider the positive aspects of reality. Men and women are subjected from childhood to an inexorable process of adaptation; certain principles, contained in brief formulas are endlessly repeated by the Press, the radio, the churches, and the schools, and by those kindly, sinister beings, the North American mothers and wives. A person imprisoned by these schemes is like a plant in a flowerpot too small for it: he cannot grow or mature.”
~ Octavio Paz

#60 Downsized and Delighted on 12.04.09 at 11:10 am

# 16 SB “I intend to eventually make a profit, but my particular business is such that there are significant barriers to entry that will preclude me from making any significant profit for several years.”

Claiming expenses to offset income is one thing, but creating a loss is another. When you yourself admit that the potential for profit is zero, you may be giving other readers the wrong idea. You cannot claim losses against other income from a business that has no expectation of profit.

#61 rory on 12.04.09 at 11:10 am

from #7 Sean …

“Garth, you are focusing on revenue raising measures, tax hikes. Government could try to shrink itself by chopping civil servants, gouging their pensions and entitlements and in general bring their total compensation more in line with the private sector. Is any of this likely to happen?

It would be symbolic only. Not substantive. — Garth”

Garth, are you saying that the cost of Gov’t cannot be changed due to the politicians being well, politicians, or that the public service unions are too powerful or that us, the sheeple, have no real power so we are to be ignored

Or are you saying that the cost of Gov’t is not high but just in that sweet spot even though studies show that they are paid 7 to 45% more in wages and benefits?

If so, then I guess we have no choice but to bend over and pay more …is that what you are really saying.

There are roughly 200,000 civil servants. If you cut the number by 25% government services would crumble and the savings would not even be noticed. That’s how big the deficit is. Remember, we gave $10 billion to the car companies, and this week $20 million to Galen Weston. — Garth

#62 Mike (Authentic) on 12.04.09 at 11:16 am

“More Canadians should stop flailing around seeking silver bullets (Yaletown condos, gold bars, 3xETFs) and look over their shoulders” – Garth

Ah, the get rich quick scheme. How many have lost something to such schemes? I bet MANY more lost than gained!

Check this out: CNN November 30, 2009

Military-style, cult pyramid schemes hit China

“This is so easy, such an easy way to make money. Is it possible?”

The answer of course is no. Forget precious metals, penny stocks, ETF’s, RE flip, “the next big thing”, lotto, bingo, etc. The answer to the best odds of getting rich is down the road of honest days work.


#63 Alberta Ed on 12.04.09 at 11:17 am

“Dubai’s construction boom was fueled by easy credit, a poorly regulated market overrun by speculators, and cheerleading from Dubai officials.” Wall Street Journal

Sounds pretty much like Canada’s housing market.

The solution to Canada’s current fiscal crisis, created by a series of governments addicted to spending, is to stop spending.

#64 PeckedToDeathByDucks on 12.04.09 at 11:18 am

:-) Going Forward :-)

Now that all is positive and we are out of recession and that jobs are being created in Canada, and that Banks are profitable and able to raise $45 Billion overnight, we should expect to see the following:

– Higher tax receipts coming in to rapidly eliminate the debt. Dear Mr. more excuses allowed.

– Bank accounting reverting back to mark to market instead of the phony mark to model.

– No more massive digital-created money through “monetary easing” by the central banks

– No more endless “stimulus” with sexual imagery comparing it to taking “half a viagra”.

– A rise in interest rate to finally pay the savers and retired something for a lifetime of sacrifice and work.

– No need to raise the USA debt ceiling as TARP money is just rolling in and the stimulus money is only half spent.

– No need for the Treasury to be the only buyer of mortgages. There is other wealth out there, not just taxpayer money.

Great positive, news today!
(Puzzle of the day….?How could Golman get their jobs predictions so terribly wrong?)

:) going forward :)

#65 Live Within Your Means on 12.04.09 at 11:23 am

#23 just_a_normal_guy on 12.04.09 at 1:01 am

Immediate slash in the amount of pension drawn by Canadian citizens staying permanently overseas.

AFAIK you cannot live outside Canada for more than 6 months or else you lose your Canadian pensions. Sure there are people that do that, but it is illegal.

Garth, the govt. has already started to change CPP rules.

“Those who take CPP benefits before age 65 will have their pension reduced by 0.6% (from the current 0.5%) per month for each month that the pension is taken before age 65. Similarly, those who delay taking their CPP benefits will see it increased by 0.7% per month (from the current 0.5%). In other words, CPP benefits are reduced for a person who begins drawing at 60 by 36% (up from 30%) and increased for a person who waits until age 70 to 42% (again up from 30%).”

I believe it will change in 2011 but can’t find the site which I thought I had bookmarked using Chrome.

That has been the case for some time. Drawing CPP early is a losing game. — Garth

#66 gwcanuck on 12.04.09 at 11:27 am

#41 kw
If your son can’t keep $1000 in the bank and your student daughter has a maxed out credit card, it sounds to me like the problem started at home.

#67 Downsized and Delighted on 12.04.09 at 11:27 am

#41 KW : You haven’t worked since 1993? Maybe you should be writing the books instead of Garth.

#68 vreaa on 12.04.09 at 11:32 am

“Your choice is to hustle, or to be stepped on by hustlers.”
(On the misallocation of resources in a bubble.)

#69 miketheengineer on 12.04.09 at 11:35 am

#30 Nostradamus le….

On one of these posts, sometime in the past, someone once said, we are now in a pre-WWII Germany situation, where hyperinflation will occur next. Bob Chapman in your article that you posted just stated that June is when all the fun starts.(USA that is)

If that is the case, and the USA goes Hyperinflation, what the hell will happen to Canada? The guy from Argentina, stated that when Argentina had their banking crisis, it was better to spend your money now and own something, like a Car or boat or something. Cause when your money is gone, it will be gone. But a Car is still a car, and carries a “real” value.

That was the only advice, spend it now before it is gone.

Garth thinks this won’t happen. What does Garth think of Bob Chapman and his Jan 1 prediction, and the affect on Canada? Will the USA hyperinflate? If it does, what happens to Canada? Do all the USA products we purchase, ie fruits, veggies, canned goods, shaving cream, go up so high that we can’t buy them, or does the mighty CDN buck be soooooo great that it can buy a truck load of lettuce with a toonie? Or are we tied at the hips to the USA and if the USA hyperinflates, then Canada must hyperinflate also.

Just as a side note, Mr. Chapman, predicted a bank holiday back in Oct, which did not occur. So predicting the future is a best guess. Lets hope Mr. Chapman is wrong again.

#70 Bruce Chase on 12.04.09 at 11:36 am

But but but….Garth, say it ain’t so, I’m about to file for my CPP…..

#71 ca on 12.04.09 at 11:40 am

Examples of up and coming increases in taxes and fees

#72 T.O. Bubble Boy on 12.04.09 at 12:01 pm

I find it completely ridiculous that these people protest the HST, but I guarantee not one of them protested the spending/stimulus/etc. that put the Country’s finances in this position in the first place.

Harper and Dim Jim Flaherty have been touring Canada and the world for 3-4 years now, blowing their own horns about how great our Country’s finances are, how we’ll never hit deficit. I can’t even keep track of how many ridiculous “initiatives” they’ve announced… each one eating up millions if not billions of dollars:

– GST Cut!
– GM/Chrysler Bailout!
– Random Tax Cuts!
– Buying Bank Mortgages to “free up credit”!
– Home Reno Tax Credits for all!
– And even this week: reno-ing Maple Leaf Gardens!

I mean, seriously, if you cheered any one of these initiatives, you shouldn’t be protesting that you don’t want to get taxed to pay for them.

I bet half the people in this line just came from a Home Depot, shopping for their new kitchen so that they can save 15% on it with the home reno tax credit.


#73 Reasonfirst on 12.04.09 at 12:09 pm

#17 Gold Bugger:

Granted our government isn’t the most efficient organization and money is undoubtably wasted. However, governments do create stability and stability encourages investment. Your scenario of anarchy would see investment leave the county in droves and we would all be a bunch of hunter-gatherers run by warloards. Maybe you would like that but most people don’t.

#74 T.O. Bubble Boy on 12.04.09 at 12:09 pm

Oh Ya – I forgot one: the TSFA!

The banks and government probably spent the equivalent of 10,000 salaried jobs to advertise these things.

How many people signed up for a TFSA with one of the big 5 banks, only to realize that (if you choose the wrong investments, like a basic high interest savings account) these are just a scam to get money out of chequing accounts and into “investment” accounts so that they can collect more fees.

Anyway – my point is: anyone who cheered the TSFA should not be protesting the HST to pay for the drop in tax revenues.

The TSFA is not for saving. — Garth

#75 kw on 12.04.09 at 12:10 pm

#66 My son has recently moved to AB to find work from NS. He worked in NS seasonal as that was the ONLY job in our area. He saved when he worked and even missed his Grade 12 Graduation. He worked all hours possible and yet was not qualified for ei as it would have been a first time claim and all rules were changed to make it harder to get ei. Others where he worked had previous claims and worked minimally just enough to get ei. We appealed his claim to no avail. Being a constant abuser of the system was never the intention. Him saving enough to help us with our living expenses and hold him over til the spring of this year was the plan. He had intended to go west but the crap hit the fan and he had no money by then. He was persuaded (not by us) by his peers to remain in NS for another season. Just in the past month his sister who is in AB persuaded him to go out. He once again has very little money. He is rather introverted so has a hard time with the job interview. Totally opposite of his sister.
His sister is working her way through grad school and has very limited wages at this time. She paid for his flight out. She is no different than most students, I am sure, saddled with easy credit induced debt. She graduated with honours BSC. so she has a head on her shoulders.
I guess it is our fault that the cost of living is so high and we couldn’t convince our kids into not participating in the easy credit scam. Our son would have a few more dollars to his name if he wasn’t being pickpocketed by the bank like everyone else who can’t keep the minimal $1000 to waive the fees.

#76 Drake on 12.04.09 at 12:17 pm

“‘temporary’ revenue-raising measures”, like the income tax was? Remember those “tax this!” bumper stickers during the Mulroney era? Time to get more printed up.

#77 dave from Oakville on 12.04.09 at 12:19 pm

#23 just_a_normal_guy

“-legalize marijuana
-legalize prostitution
-open casinos”

I fully agree that within the next 5 years the government will resort to legalizing the above 2 and continue to expand on its casino revenue. Canada and Us are now turning into “Saddam & Gomorrah”.

But what choice does the government have?

Sure they’ll try to cut programs, but the two largest costs to the government, healthcare and education spending continues to climb all the while they continue to lower corporate taxes. The government has declared they are not interested in your well being. If they cared so much about you they would have banned cigarettes and alcohol years ago. It is clear both contribute far more deaths a year than sars, h1n1 will ever. Both of those also contribute to government revenues in the form of taxes on each.

Basically now there are 2 classes; lower class, anyone working fulltime and paying full income tax and upper class, anyone smart enough to have seen this gov bs long ago and found ways of hiding there income from the government by starting a corporation and working contract or hiding income overseas, etc.

Unfortunately, governments are now even trying to crack down on these tactics even if your are using legal tax avoidance techniques. They are using the tactic of allow at first, then deny everything and charge interest and force you to fight it out in court.

Someone posted this before but this video has some very interesting ideas worth watching.

Zeitgeist: Addendum

Basic idea is humans are fast becoming unnecessary by companies. Work required now can be replaced by faster more efficient machines than humans. Machines can now even operate on humans via the internet. I fully agree with this idea. I mean do we really need that guy handing out TTC tickets or even those guys on the assembly line at GM. They likely all can be replaced.

Right now companies are resorting to moving their factories offshore for cheaper labor costs but years from now they will possibly again move their plants to somewhere else with even cheaper labor costs or more likely replace all of even these jobs with machines.

So prepare for global unemployment to continue to rise in years to come regardless of the numbers they are telling you.

On the subject of HST. Well who likes added taxes. But a flat tax which everyone pays equally is much better than a progressive tax that discourages and penalizes people from trying to earn more income. What I do find confusing is how the government can say this tax will create 600,000 new jobs over 10 years.

#78 DaBull on 12.04.09 at 12:20 pm

#22 Crash

More Corporate tax, less jobs and less corporate spending. Less jobs, less personal income tax and less consumer spending. Both add up to less economic growth and less taxes . Besides if you give the government more taxes, they spend it on more goofy Government programs, which means less money in the pocket of people who need it. Get the picture.

Corporations in Canada should not pay any tax, period. They provide a service, it’s called “a job”.

Government, as it is now, is trying to provide too much of everything and not enough of anything. ie. It’s the biggest money waster on the planet because it is so inefficient. Corporations on the other hand have to be efficient, otherwise they cease to exist. Government on the other hand can be as inefficient as they want because they have the taxpayer to fall back on.

And, YES I know some big corporations in Canada have been sucking on the Government teet for years. But that’s a different story. The average corporation in Canada dies if it is not prudent with it’s money.

#79 Azza4 on 12.04.09 at 12:20 pm


How can Canada afford Tax and Trade treaty that is supposed to be signed in Copenhagen? Isn’t it to deprive people from their money and businesses from the freedoms (the money and freedoms still left that is)? Isn’t it yet another tax that will break the back? What is your take on Climate Gate scandal? I’m so looking forward to your blog entry discussing all of this.

You’ll be disappointed. — Garth

#80 knucklewalker on 12.04.09 at 12:21 pm

I have to laugh sometimes at the commentary and indeed even the posting (sorry Garth). This site is a level 2 doom site… all seem to think that your problems revolve around “financial issues” and that if you can be clever and avoid financial pitfalls (“legal tax avoidance, NOT buying a piece of shit real estate etc) that you will be OK.
I got some news for you……if you are over 65 now, then carry on…Garths advice is pretty sound…

If you under..then you need to graduate to level 4 doom. Review concepts such as “modified hubbert curves”, Orlovian stage 4 collapse etc.

The future is so much worse than you can possibly imagine.

I think that the RRSP issue is a JOKE….as a 40 year old professional……my cash goes to PMs, guns, food, follow the omega strategy short term….., we are going through a full on stage 4 collapse of world civilization…..I know hands in the air run for the hills right :)….

The economic/social/environmental ndicators are all there in plain sight…..

People vastly underestimate the vital importance of the world peaking in oil production in 2005 and the fact that we are now in the downside slope of the hubbert curve should scare the shit out of any thinking intelligent person.

RRSPs as your primary concern…..I doubt it……avoiding long term taxation by other means (leave it to your imagination)…sure!

#81 $fromA$ia ( o Y o ) on 12.04.09 at 12:28 pm

Mike the Engineer,

“What does Garth think of Bob Chapman and his Jan 1 prediction, and the affect on Canada? Will the USA hyperinflate? If it does, what happens to Canada?”


The world wide economy crisis has been brought on by a worldwide housing bubble… Examples, Shanghai, Canada, California, UK etc etc.

We are no exeption, aparantly we printed more money per person the the USA…Canada is in the game, ball$ deep!

We are not different and our $hit does stink!!!

#82 kw on 12.04.09 at 12:31 pm

#67 I lost what I call my career job in “93. I have not worked since 98′. We made some decent financial choices in the 80’s (paying off mortgage in 7 years) on one income. With a very supportive wife who packed a cooler that lasted the first half of the week while I was on the road allowed us to save a substantial amount of “living expenses”. In the 90’s we took equity from our paid off home and invested in the equity markets. By skill and mostly luck we were fortunate with this manouver. Our entire life we have lived frugally on one income and now no income since ’98.
Like I said, I would love to be working at a satisfying postion with a life sustaining wage. But for the last 11 years my kisses have been for my wife and not some employers butt.
As far as writing a book, it seems that that is a common method of earning money today. Would you buy it?
We sure could teach some individuals about penny pinching and more. I read or was told that it is easier to save a dollar than to earn one. We spend as little as possible. We make sure the fridge is full and the stove is fired up. Our pastime of strength training is a very inexpensive hobby. And we don’t abuse the health care system. Maybe we could be a consultant to the governments finance department. We could get Flarerty doing some crunches and

#83 Michael on 12.04.09 at 12:35 pm

“That’s why taxing real estate and retired people, for example, is far more convenient.”

Garth — I’ve always wondered, do you support the economic tenants of Georgism (Henry George)? Basically, move taxation to land values, and minimize all other forms of taxation (income, capital gains, sales, etc). The idea being that land values are largely the product of the community, and not the individual who owns it. All other forms of taxation punish investment, consumption, and production.

#84 MIKEF on 12.04.09 at 12:45 pm

People vastly underestimate the vital importance of the world peaking in oil production in 2005 and the fact that we are now in the downside slope of the hubbert curve should scare the shit out of any thinking intelligent person.

#80 knucklewalker

Truer words never spoken.

To give money to any type of retirement fund is a sick joke.

#85 pjwlk on 12.04.09 at 12:46 pm

A short but hilarious youtube video about climategate.

Hide the decline:

#86 Toronto C9 Renter on 12.04.09 at 12:50 pm

#80 knucklewalker on 12.04.09 at 12:21 pm

“…my cash goes to guns..”

To each his own. I just pray you don’t live in my neighbourhood

(I’m hoping – and guessing – you’re in a province other than Ontario)

#87 Crash on 12.04.09 at 1:02 pm

#78 DaBull:
Thank you for trying to educate me, but you are mixing apples and oranges here. Just because government is “inefficient” does not mean tax should not be paid to said government. These are two completely separate issues. The argument you trot out concerning business efficiencies vs. tax paid is a straw man argument because a company can still be efficient and pay their fair share of taxes. What really happens when a company is given tax breaks is they become MORE INEFFICIENT because they don’t have to run as effectively. This is called “corporate welfare”.

I also disagree with your statement that corporations provide jobs as a “service”, they provide products or services as a service to the consumer; the jobs are a byproduct of this production.

#88 DaBull on 12.04.09 at 1:03 pm

The TSFA is not for saving. — Garth

No… But it’s a free money maker

On Dec 18,2008 bought 30,000 shares of v.VEN @ $0.15, total $4,500 + $250 trade commision.

Sold on November 23..25,2009 @ average $12.12, total $363,600 – $600 trading commission.

Made 360K+ tax free dollars. Not bad for a typing mistake. Was actually looking up Coastal Energy v.CEN but typed VEN by mistake. Glad those keys are so close together. Anyway I was looking for a high risk play for that TSFA money and boy did I find a good one. Some times you have to take a chance. It’s like winning the lottery.

#89 Sue Letourneau on 12.04.09 at 1:04 pm


Where does your son bank? Have him move his account to President’s Choice Financial; he will pay ZERO banking fees. I haven’t paid a bank fee in over 10 years.

#90 Fizzy on 12.04.09 at 1:05 pm

As long as the gap between the rich and poor continues to widen, the taxes should be increased. You Garth, of all people, should be supporting more tax, not raving against it, Mr. former-MP. We had way higher taxes in the mid-nineties, and the people paying them did very well, thank you very much. But no, we must have more, more, more!!! So we get cuts from ’97 to ’09 and look where it got us.

The poor of this country are dumb, and the rich should be ashamed of themselves.

#91 pjwlk on 12.04.09 at 1:06 pm

If HST is coming GST increase is irrelevant, no?

How many non-HST provinces left?

#92 jmcanuck on 12.04.09 at 1:09 pm

Hey where are all the gold bugs? Must be busy dumping their gold today. Amazing how quiet they are when gold drops.

#93 Jake on 12.04.09 at 1:16 pm

I am looking forward to your take on the climategate scandal Garth. I’m surprised cap n trade didn’t make it into today’s list, as it may be the biggest tax in the history of the world. The mainstream media has remainded eerily silent on the issue (too busy with Tiger Woods), but it will not go away. Rex Murphy discussed it lastnight on the National,

I also enjoyed John Stewart’s commentary from a few nights ago.

Both sides have a story to tell. If you get all of your news from the global propaganda newspaper called the Metro (you know, the free one that that people hand out and litter the buses with), you may only be getting one side. The debate is not over Garth. This may affect our wallets and lifestyle more than new sales taxes and it should be getting more attention.

#94 viewwest on 12.04.09 at 1:31 pm

#75 kw
I’m just a bit confused why your son would continue to have a bank account that penalizes him for lack of a minimum account. He needs to move out of victim mode and get onto something called “comparison shopping”. He’s not being ‘pickpocketed’, he’s ‘giving’ the money to the bank with his decision to stay with that institution. There are innumerable bank accounts at banks and credit unions that don’t penalize for lack of a minimum balance. These two young people need to learn the basics of personal finances and seize control of their destinies. Suggest they also spend time in a library reading personal finance books. If they can’t manage the few resources they currently have, heaven help them when they get to bigger life financial decisions and practices. I’m not being sarcastic here, I’m deadly serious.

#95 DaBull on 12.04.09 at 1:36 pm

#88 DaBull

Sorry that 30,000 shares I bought was from my RRSP, not the TFSA. I had to wait until Jan 2009 to buy from my TFSA. I only bought 13,500 @ .35 and sold at an average of 12.12 for a profit of 163K. Still not a bad return tax free. Made over 500k on one stock, not bad. I have already reinvested all those juicy profits from my TFSA back into the market. I just hope I don’t lose it all…. LOL. Oh well gotta take a chance in life otherwise you will never get ahead.

#96 disconnect on 12.04.09 at 1:37 pm

This may not be news to most of you, but may help some:
If you sell your house and a fee/penalty applies to pay off the mortgage from the sale (and you cannot get it waved), then instruct your bank to FIRST use the sales proceeds to make that ‘15%’ yearly payment (that most mortgages allow). Then pay the remaining balance off. The penalty should then be 15% lower. Not a huge savings, but every bit helps (and you need it more then the banks). And don’t forget, the 15% is typically based the original mortgage. Your bank may do this automatically, but why take a chance.

#97 rory on 12.04.09 at 1:42 pm

#61 Garth

Garth …where you got only 1 million employees from …must just be federal level …here is for 2008 stats for all G jobs

# Of Public sector employee’s – 3,490,747
$ Of Public sector wages and salaries – $169,859,124,000

So a 20% decrease in wages & salaries = $34 Billion dollars…that is billion …not chump change.
This is wages and salaries and not benefits (am assuming)…assume another 25% for benefits = another $42 billion so 20% reduction here also equals another $8B …total is now $42 billion dollars saved …results = no layoffs, no reduction in services, no tax increases, equality between private and public sectors, opportunity to reform pensions and grow out of the debt mess and 3.5m pissed off public service employees …they will get over it eventually…sounds like a hell of a plan.

Remember stats show public service is overpaid compared to private sector from 7 to 45%.

What is not to like …really!

You are adding in every school teacher and dog catcher in the land from all levels of government. If your solution is to lay off a million people, run for office. — Garth

#98 JakeTheSnake on 12.04.09 at 1:45 pm

Just an FYI for those 3x ETF’s – Margin requirements from FINRA put those up to 90%, so they’re dead for most.

#99 Azza4 on 12.04.09 at 1:57 pm

You’ll be disappointed. — Garth

I will rater hear it anyway just to get one more educated opinion.

#100 kw on 12.04.09 at 1:58 pm

#94 To dead serious.
He simply opened this account as this was the one that supposedly fit his needs, so the bank person deemed. My son told him that his work was seasonal and at the time of opening he had a few checks saved up. It wasn’t long before he was under the $1000 limit. He was using a debit card which he didn’t track closely enough. When I found out about this the fees had mostly been racked up. I left this in his hands, you see.
I thought it best to let him learn the hard way and to learn some of the basics of personal finance before they face bigger financial concerns. I was simply stating a fact which was that the bank was indeed charging him for being under the limit.
You aren’t a bank manager, are you?

#101 Evangeline on 12.04.09 at 2:15 pm

((Both sides have a story to tell.))

That is true but the real story is that one side of the debate won’t acknowledge that there could be another side. To them the question is settled and anyone who doesn’t toe their line is written off as a crank or a kook who should be silenced. As usual, big $$$$$$ is at stake.

Rex’s editorial was great. Thanks for the link.

#102 junius on 12.04.09 at 2:18 pm

I am surprised we haven’t seen more comments on the Remax release today. Love this quote,

“2009 was without question the year of the house,” Michael Polzler, executive vice-president, RE/MAX Ontario-Atlantic Canada, said in a statement.

“Real estate not only defied industry and analysts’ predictions in 2009 — its performance went well beyond the realm of expectation by boosting consumer confidence levels and ultimately kick-starting the national economic engine.”

When will people realize that Real Estate is a secondary and not a primary industry in our economy? If people don’t have jobs in manufacturing or other primary industries then they can’t afford homes. A strong real estate business must be based on a strong economy which we don’t have!

#103 questioning on 12.04.09 at 2:23 pm

It is getting better!

#104 Oakville Owner on 12.04.09 at 2:27 pm

#89 and #94

Thank you !!!!!!!!!!!!!!!!!!!!

Anyone still paying these bank fees are nuts. You can go to any CIBC ABM or PC ABM with no fees. Debit is no charge. Free cheques, and online is free. I heard that basic personal finance will be taught soon in public schools. This can’t come fast enough. In my line of work I see all kinds of kids that will never get ahead due to the poor choices their parents make and inevitably teach their kids.

No I’m not a Teacher. And yes I do realize that the banks charge the businesses fees every time I swipe my debit card that get passed on to me by the business, but why pay twice.

Educate your self people. Go to the library, speaking of which I have to return After the Crash and 2015 After the Boom before I get charged the late fees :)

#105 Toronto C9 Renter on 12.04.09 at 2:28 pm

#88 DaBull on 12.04.09 at 1:03 pm

“On Dec 18,2008 bought 30,000 shares of v.VEN @ $0.15, total $4,500 + $250 trade commision.

Sold on November 23..25,2009 @ average $12.12, total $363,600 – $600 trading commission”

DaBull, you’d think a skilled trader like you would know that to pay anything more than 9.99 commission for those trades is outrageous. Those trades would have cost me 7$ on my Waterhouse account.

$850 for two lousy trades?? Unfortunately thats not even the most unbelieveable part of your story

#106 Evangeline on 12.04.09 at 2:31 pm

((I would love to be working at something productive. But I so far have refused to work for half the previous wages of my career job lost in ‘93 because of free-trade.))

Often, if one takes a position for less money, and is grateful for it, works hard, is honest, and willing to go the extra mile, they will find themselves promoted to a higher position and can work their way into a job that exceeds their previous loss. Any employer can tell you that a hard working, honest, loyal, dependable employee is worth their weight in gold. The key is attitude.

#107 Kelly McMae on 12.04.09 at 2:32 pm

#44 infernalmachine on 12.04.09 at 8:42 am

Indeed. Each time the public sector negotiates a major topic is market equalization. The top %2 is very adept at convincing the “plebs” of what’s in their best interest.

The trickle down theory stinks, always has, and always will.

#108 Oakville Owner on 12.04.09 at 2:39 pm


Good info thanks. Another option is to hold an open mortgage. If you negotiate it right you can still get very low % rate, pay it off any time, like when you accidently buy stock at $.15 and sell for $12.12 (Dabull you should buy a lotto ticket man). Oh ya and when rates go up next year, you still hold all the cards if you want to lock in.

#109 David on 12.04.09 at 2:43 pm

Excess Liquidity Pushing Up Food Prices

Inflation is no free lunch. You can try to inflate asset bubbles to stop Depressions, but to the average person it will end up feeling the same, as their stagnant wage can’t cope with increasing prices for food, energy and housing.

#110 CashAndFreedom4u on 12.04.09 at 2:45 pm

#16 – Schroedinger’s Bull

I totally agree. I’ve had a home based business since the late 1980’s. In the red some years, in profit others, as I usually start a few new businesses every year and my accountant pools them together as one source of business income (perfectly legitimate).

My focus is on internet marketing, and am now doing this as my primary source of income, but in past years I also had employment income. I was able to write off losses (some years) against my employment income.

People need to be aware of the tax advantages that are available to us. If you’re not using them, you should be – they may not be around forever.

#111 jess on 12.04.09 at 3:06 pm

interest rate swaps/ derived desperation
lots of tax pain

New Jersey’s 2004 school-bond swap with Bank of Montreal was linked to a $250 million bond originally scheduled to be sold in 2007. The so-called forward-starting agreement was one of 15 such contracts the state set up to help finance construction. …

Penalties and Losses

New Jersey isn’t alone. Borrowers from Massachusetts to California are struggling with billions of dollars in swap penalties and losses at the same time that budget deficits expand to an estimated $350 billion in 2010 and 2011, according to the Washington, D.C.-based Center on Budget and Policy Priorities.

The derivatives, mostly interest-rate swaps used to exchange fixed payments for variable rates, have grown to as much as $300 billion annually, the Alexandria, Virginia-based Municipal Securities Rulemaking Board said in an April report, citing information from market participants.

Derivatives have created “unprecedented financial stress” for some of the 500 municipal issuers that sold variable-rate debt and purchased swaps from banks to lock in borrowing costs, according to an October report by Moody’s Investors Service. The biggest users of the arrangements are Pennsylvania, California, Texas and Tennessee.

The U.S. Justice Department and Securities and Exchange Commission are investigating whether Wall Street banks conspired with brokers to rig bids on the contracts.

fee traders…..

Banks intend to become the intermediaries in this fledgling market. Although U.S. carbon legislation may not pass for a year or more, Wall Street has already spent hundreds of millions of dollars hiring lobbyists and making deals with companies that can supply them with “carbon offsets” to sell to clients.

JPMorgan, for instance, purchased ClimateCare in early 2008 for an undisclosed sum. This month, it paid $210 million for Eco-Securities Group Plc, the biggest developer of projects used to generate credits offsetting government-regulated carbon emissions. Financial institutions have also been investing in alternative energy, such as wind and solar power, and lending to clean-technology entrepreneurs.

The banks are preparing to do with carbon what they’ve done before: design and market derivatives contracts that will help client companies hedge their price risk over the long term. They’re also ready to sell carbon-related financial products to outside investors.

#112 junius on 12.04.09 at 3:07 pm


I am not sure if you have read Jonah Lehrer’s book, “How We Decide” but I thought it was excellent. He has a great post recently on market bubbles and human psychology:

#113 Ultraman on 12.04.09 at 3:10 pm

#96 disconnect,

This is a no go. Most mortgage agreements have a clause preventing this manoeuvre as follow: “The Borrower cannot make a partial prepayment without penalty at the same time as the Borrower makes prepayment in full or in the 60 days preceding prepayment in full”.

#114 Nostradamus jr. on 12.04.09 at 3:13 pm

Citizens of North Shore, Vancouver, are very lucky people.

…If we pay new HST then RE Prices going up double HST Govt grab.

Is because North Shore have only elite and wealthy citizens….with limited land for development in this private gated community….very cool

Nostradamus jr.

#115 bill on 12.04.09 at 3:15 pm

This gold bug is busy reviewing the merits of various gold jrs with ”pounds in the ground”. Perhaps they arnt saying much because todays topic is about taxes ?

#116 Greateast Storm Ever A Coming on 12.04.09 at 3:16 pm

Arthur Blumenthal of Stack’s Rare Coins in New York City has been in the gold and coin business since 1974. Stack’s opened its doors in 1934 and is the oldest coin dealer in America. Blumenthal saw the “go-go years” of the late seventies gold market firsthand. Blumenthal told me, “I have never seen anything like this before! There are only buyers.” He says many of his customers are “Wall Street types who are buying physical gold for the first time.”

Williams says buying gold and silver “long term” will be your best defense against a “great collapse…dollar crisis… and hyperinflation.” Williams also says you should stock up on food and other necessary supplies because the coming crisis will create shortages in all sorts of things.

#117 Reasonfirst on 12.04.09 at 3:21 pm

How does all this fit in with someone whose career prospects will greatly improve as boomers retire and get the f out of the way?

Sounds pretty much like a wash…crap!

#118 Greateast Storm Ever A Coming on 12.04.09 at 3:33 pm

#80 knucklewalker for Prime Minister !

You are on the right track, The paperbug sheeple have no fricking idea whats about to happen to them, I see them as the walking dead, they just do not know it yet, and when they finally do find out, it will be to little to late for them and their poor kids.

I live in Ontario near the GTA and good luck to you all signing up for a gun license. By the time you get in and finally have your license in your hand your time to prepare will have run out! Garth has prepared just in case, have you not Garth?

#119 Riveted on 12.04.09 at 3:47 pm

I’m a big fan of this blog and still believe that a day of reckoning is in the cards for financial and real estate markets. I’ve been counting on it, actually, and have postponed a house purchase twice hoping to swoop in like a vulture in a couple of years. I have to admit, however, that lately…doubt has set in. Am I catching the dreaded Greater Fool Fever, or is there substance to the argument that maybe (just maybe) Canada might be (just a little) different than the US? I am a huge fan of Dave Rosenberg (Gluskin Sheff) and read his daily bearish musings. He’s a perennial stick in the mud but is awfully bullish on Canada right now. He quotes this report from the Cleveland Fed:


“Despite their many points of similarity, housing markets in the United States and Canada have fared quite differently since the onset of the financial crisis. Unlike the U.S., Canada has not experienced a dramatic increase in mortgage defaults, nor has any Canadian bank required a government bailout. As a result, observers such as The Economist have pointed to Canada as “a country that got things right.”


“Given the key role played by the “subprime” market, the question is why the Canadian subprime market was both smaller and levels of securitization were lower than in the U.S. While it is difficult to disentangle the reasons why Canada avoided the subprime boom, some factors can be identified that may have contributed to the differences in the Canadian and U.S. subprime markets. Perhaps the simplest story is that Canada was “lucky” to be a late adopter of U.S. innovations rather than an innovator in mortgage finance. ”


#120 Repatriated Expat on 12.04.09 at 3:49 pm

A $1000 minimum deposit required to avoid bank fees?

My bank is $3000 otherwise the fee of $12.95/month FOREVER kicks in. Or at least until the destitue banks raise their fees (taxes) again. Whatever happened to fair trading?

My point is anyone who can gain any leverage on you (govt, banks, utilities) will tax you to death and hence the reason for the many comments on not buying anything and flying under the radar.

Maybe the only solution down the road is to live in a McMansion communally with shared services and resourse.

The amount of monthly cash outlay required to sustain a single-family, middle-class household today is staggaring.

I don’t think our standard of living is going down, it has already gone down. People just maintained the same standard of living by going far, far, far into debt.

We all here know the numbers.

#121 Peter in TO on 12.04.09 at 4:29 pm

It appears that based on the Feds budget they need to do a 10-20% across the board cut to all programs. This includes CPP and EI. This would not be a popular choice but it is a necessary choice.

Unfortunately too many have gotten used to living off the trough and will find it hard to swallow such a pill.

#122 EB on 12.04.09 at 4:31 pm

“Maybe the only solution down the road is to live in a McMansion communally with shared services and resourse. ”

I have said for years that this kind of communal living will become commonplace as the huge number of boomers with no retirement savings and only minimal pensions band together to survive.

#123 late to the party on 12.04.09 at 5:13 pm

to #119.

The only thing they did right in Canada is that they withheld the truth from the Public.

There were numerous links on this forum regarding last year silent bailout of Canadian banks in the realm of $75 billions through Insured Mortgage Purchase Program (IMPP).

Another $200 billions were spent in 2009 through Extraordinary Financing Framework (EFF) program

I couldn’t find the link, but I remember seeing CMHC financial statements and there is a $50 b increase in mortgage backed securities, which means that 2009 RE recovery was largely financed through CMCH, read Canadian government.

So anytime this bubble goes bust the loss is on the taxpayer. And it’s in government’s best interest to keep that from happening no matter what.

#124 late to the party on 12.04.09 at 5:15 pm

CMHC financials, no data for 2009, so my comment regarding 2009 CMHC spendings is incorrect.

#125 knucklewalker on 12.04.09 at 5:27 pm

#118 why thanks for the support man :)

I saw what holding elected office did to my old man…no thanks :)

People are indeed beyond sheep…..only the truly stupid can possibly believe that in the face of declining energy supplies (unique in all recorded history) that the “financial markets” and socially accepted norms will hold for even the very near future.

Modern western humans are not in any way prepared for the coming dark ages (except perhaps biker gangs :)

We need to pull our collective heads out of our asses and prepare for the world as it will be and it will be lot more similar to “The Road” than most folks would want to admit.

#126 TakingResponsibility on 12.04.09 at 5:27 pm

Thanks, Jake – #93 on 12.04.09 at 1:16 pm – for the links re Climategate! Gotta’ love Rex and Jon – Irony rules!

And, jess #111, good link re: response to the “climate market.”

I’ll add a link from the latest tweet around the world linking cap and trade to the Storm Brewing the Biggest Mother of All Bubbles:


#127 Live Within Your Means on 12.04.09 at 5:37 pm

I believe it will change in 2011 but can’t find the site which I thought I had bookmarked using Chrome.

That has been the case for some time. Drawing CPP early is a losing game. — Garth

When I attended a pretirement seminar, put on by my provincial govt., the break even point was 77 yrs. old. Most of those who attended those seminars took their CPP at 60. As I don’t anticipate living that long, for me it was worth it.

#128 Live Within Your Means on 12.04.09 at 5:50 pm

That has been the case for some time. Drawing CPP early is a losing game. — Garth

Tell that to people who are nearing 60, who’ve lost their jobs and can’t collect EI because of the damn rules.

#129 Soju on 12.04.09 at 6:13 pm

Canada should apply a simple flat tax at source. No long stupid list of deductions or different rates for RCT to have to go through. No extra taxes at the cash register. No more dealings between busineses and RCT except for that business paying their flat tax on the money they made. Once your taxed the rest is yours. if you make money from your saved earnings it’s yours. Now everyone will be more productive. Get rid of the accountants and 3/4’s of RCT. What do you need them for… It’s simple if you work for the cash you pay flat tax. you make more money from your savings it’s yours. No more need for the government to manage RRSP’s or TFSA’s. Why such a big machine for something so simple. Why do we need to create forms of deductions or different avenues to tax people. The government should know how much they need to run the country just take it off once!

#130 Dan in Victoria on 12.04.09 at 6:23 pm

Post#80 Knucklewalker, Re-Hubbert curve etc. etc.
Add this in for thought as well. “Jevons Paradox.” And yes, I think there is going to be a huge change. The smart ones are already preparing.

#131 knucklewalker on 12.04.09 at 7:18 pm

post 130 jeavons paradox

yeah I’ll bet not even 5% of the people on this site…let alone the general populous even knows what that term implies……we are so screwed.

I would’nt pay an accountant/tax lawyer a single red cent as their entire premise of the future is completely and utterly false.

I wonder how folks in say Somalia are doing with their “investment” portfolios…..actually we should be paying some of those folks to come over here and show your average putz tax lawyer what it means to “lose everything”….the death of a single goat can mean life or death.

I used to teach an integrated financial/biological/defense course back in the 90s with just the unfolding scenario in mind…people thought I was to “pessimistic”

I’d rather be a well fed pessimist than a starving shell shocked sheeple who after contributing to his/her RRSP…GIC….stock options…..for decades finds that it is hard to escape 15000% inflation (or more), the collapse of the “social safety net”, and a full on explosion of crime that always accompanies stage 3/4 collapses…..

#132 Ghost of Tom Joad on 12.04.09 at 7:20 pm

Well Garth, I hope you’re going to stop worrying about global warming.

Looks like that fat fraud Al Gore has been lying to us all along:

Anyone still doubting the existence of the evil New World Order, better stop doubting and start listening and learning from the great Alex Jones:

Wrong blog, dude. — Garth

#133 Nostradamus Le Mad Vlad on 12.04.09 at 7:30 pm

#25 Devil’s Advocate — “. . . the performance this year over its predecessor is a foolish game.”

Agreed; weather forecasts have been known to change from day to day, so forecasts of all kinds are pie-in-the-sky events, shooting at dartboards with feathers. Most of them are not worthy of the paper they are printed on.
#69 miketheengineer — I refer you to the response #81 $fromA$ia ( o Y o ) gave.

Most here seem to be on the same page, we all post interesting, different links along with our POV’s.

After the ‘lympix are done and over with, it shall be interesting to view the goings-on in the planet, fiscal and otherwise and possibly to resurrect some of links presently posted.

A while ago, a link I posted said the US Fed had ordered the BoA to absorb all the toxic debts / mortgages / losses. The BoA would not be able to do this, and would turn to the US Fed to bail them out again.

It’s a continuous, vicious cycle and until sheeple wake up and realize they are being fleeced and forced to pay more and more via new taxes, the rich will keep getting fabulously wealthy; the rest sink.

#125 knucklewalker — Good posts.
5:35 clip on how Bernanke is destroying the US economy (with Celente). Goes with #69 mike and #81 $from$ Asia posts. — Clip
There is more than tax-hikes to the complete waste of time known as GoreGate. BTW, the Arctic is loaded with ice (need Google earth which I don’t want). — Fraud

GoreGate under a different moniker — AnotherGate “But Osterhaus appears to have financial links not just to Roche but also to GSK, Aventis and Baxter.”
It is Israel’s goal to trick the US and Russia into having WW3 by themselves and wiping each other out. Then Israel can drink all their oil and use their resources to clean up after.

All China has to do is destroy Dimona, then the Palestinians and Israel are gone — War

#134 rory on 12.04.09 at 7:31 pm

From #91:

“You are adding in every school teacher and dog catcher in the land from all levels of government. If your solution is to lay off a million people, run for office. — Garth”

Hello and yes …all are on taxpayer money …read closer …20% reduction in wages, salaries, and benefits …NO layoffs, NO layoffs…did not say you could get elected on this platform …I see NO other solution from anyone on how to correct such a huge deficit …all talk, no solutions … no long term anything. Anybody got something real that could actualy work???.

#135 Live Within Your Means on 12.04.09 at 7:52 pm

#139 Dan in Victoria on 12.03.09 at 9:24 pm
Post#122 Live within your means. I’ll explain the contractor side of things to you so you understand where we are coming from.DON’T take offense none is meant from me.
Home owner buys all nessasary materials.
So you want a labour contract.
I pay all the stuff Garth was talking about re taxes.
As soon as I put foot on your site I am losing money. Period. Profit on material is required.
I cannot run a buisness at break even or a loss.
We don’t do it as a hobby.

Dan – just saw your response a while ago. I go to bed early. So how much do contractors make on those purchases – 10 – 15%?
Most home owner supplied products (not all) have been bought as a clearance items, damaged, scratched etc.”Deals”
Again (not all) materials supplied are sometimes difficult if not impossible to assemble/use.
Example, Chinese light fixtures, plumbing faucets/taps, sinks, some makes of cabinets, floor tiles (sizes and thickness)

I can assure you Dan that what I bought over a 6 month research period were good quality products, e.g. 2 Caroma 3/6 lt toilets from Australia, Fleurco, Crane, etc. products. I’m fussy and thats why my husband wouldn’t go ahead with the renos until I chose all of the materials, including fixtures, tiles, etc. None are used, inferior products. Some, no doubt , are made in China, as all N.A. mfgrs. offshore their manufacturing.
Lumber, check your sizes, some American mills have slightly diffrent milling standards than Canadian mills.
Drywall, paint, hardware quality etc. “Or” missing key parts.
My favorite, “contractor pot light packs” Do you honestly think we should spend 10 minutes per light adjusting bulb angles and heights? On something we would never ever use?
And the construction of them, “Gee we got these for 3 dollars each.”Now look at them, the junction box is on top,where does the heat from the bulb go? Right, it goes into the junction box and cooks the wires, result fires in 20-25 years.

Dan, my husband completely renovated our kitchen/dining/living area 10+ yrs ago. Redid walls, all cabinets using 3/4 in. plywood in kitchen/dining/living room (except doors). Built shelves, cabinets and installed granite around an inserted fireplace. Redid all the wiring, lights and plumbing. He did have certified electricians and plumbers approve it. He had installers do the wood floors as he did not have the knowledge. We’ve never had a problem. He also installed an air/heat exchange and an alarm system throughout the house. I was fortunate that while those renos were ongoing, my husband moved a sink and dishwasher to another area so I didn’t have to do without. He has moved my washer and dryer to the back basement and created a temporary vent for the dryer so I’m not without them while the reno is being done.
We know what is best. It is basically not worth our time to come to your site look through what you have to determine if it is suitable then do the “labour contract”

Then I say perhaps the labour contract has not been written up correctly.

How do I know that that bag of insulation that is open has not had a dog lift his leg on it, or worse.
How do I know that paint you have is not eggshell and semi gloss mixed together?
Once we have installed your owner supplied materials most people think hey I have a problem with my toilet running on MUST be something the contractor did I’ll phone him to come look at it.
We come over, nope not us look at the ball and flapper doesn’t seat right sorry.
Result maybe 2 or 3 hours lost time.
If we supply we bring a replacement and fix it.
No questions asked.
Keep in mind that here in BC the electrical MUST be performed by an electrical contractor who takes out a permit, You as a home owner may do the work but again a permit is required.
What happens if there is a “issue”and no permit, “unlicenced work.” Think about it.
Also plumbing is starting to go that way.
Those are some of our reasons for us to avoid these types of jobs.
Ok Dan. You may be right for the majority of owners. I don’t think we fit into the majority of them. The contractors who came to give us quotes were very impressed with my husband’s work. Unfortunately, due to an accident years ago my husband has a bad back and can’t do all what he used to be able to do. I believe with the reno home credit they are unwilling to take on jobs such as ours. We’ve already got a tiler in place and I’m sure we’ll be able to find other tradesmen through my husband’s friends/contacts.

I don’t take offense to your comments Dan, but I find the tone of your comments a little harsh as you really don’t know us at all.

I honestly wish you well with your project and hope it is a smooth one,and turns out like you dreams.
Good Luck.

#136 squidly77 on 12.04.09 at 8:32 pm

higher taxes will create a large underground economy

you cant fix debt with more debt and that’s what they’re attempting to do by passing GM, Chrysler and many other companies debt load onto the taxpayer
putting a clown face onto it would be a better disguise

it just doesn’t work

#137 Evangeline on 12.04.09 at 8:40 pm

(850 for two lousy trades?? Unfortunately thats not even the most unbelieveable part of your story))

When I read about those fantastic gains, I was torn between skepticism and envy …

#138 Tony on 12.04.09 at 10:55 pm

RRSP’s are a tax deferral not some sent from above sort of thing. They’re only useful if you move from a high tax bracket to a lower one and pay part of them in tax thus saving on tax at a high rate and paying the tax in the future at a lower rate. As for raising the capital gains tax chances are they’re likely lower it following what i think will happen in America in the next year or two.

#139 TaxHaven on 12.05.09 at 1:19 am

#92 JMCanuck, you’re another who doesn;t know the difference between government-issued fiat paper and REAL MONEY.

We goldbugs have not “gone quiet”; we’re buying. If this were really a parabolic rise, maybe we’d be selling. But it isn’t.

When every government on earth is trying to flog debt; when 70% of our economy consists of consumers selling imported or unnecessary junk to one another; when despite zero interest rates most proles STILL find their living standards falling; when half the population counts on a government job, works for a government contractor or depends on a job that exists only because of some government regulation or edict and when absolutely everyone looks to the nanny state for sustenance,

…gold can only go to the moon.

#140 Taxpayer like you on 12.05.09 at 1:41 am


I confess to having to wiki “jeavons paradox”, but at a glance, it seems to cover the situations like buying a fuel
efficient car but then driving more, hence saving nothing
in money and resources. Is this basically correct? If so, I
think most of us on this blog recognize it in many
different guises, just never put a name to it.

#141 Dan in Victoria on 12.05.09 at 3:54 am

Post 135 Live within your means,Unfortunately you have taken my post out of context, I made a point of explaning that there was no critism of YOU or what you had done, again I say that. My comments were not about that.
I’m sure that your husband did a fine job. Many do better work than some trades. (really)
My comments were NOT directed at that. And are still not.
I have explained to you why us/most contractors DO NOT do labour contracts.
Do this for 38 years and you will see a trend develop re home owners.
You, and others on this blog have mentioned time and time again that contractors will “not come” for labour only contracts, now you know why.
If you don’t like my tone, sorry, I call it as it is in this industry. If you want warm fuzzy talk, that makes you feel good i’m afraid it won’t come from me. If you want the straight up talk, honest, to the point, no lies, no crap,no wishy washy that’s what i give.Take it or leave it.
Strangely, my phone rings off the hook.
Actually, what I have posted here/previously is the “G” version of what is generally said.
In BC, electricians CANNOT approve other persons wiring it is illegal, period.
And I still say good luck to you, carry on.
Also, please keep in mind that I do these posts for the benefit of others on this blog or lurkers who are looking for correct info/procedures as to construction.
Maybe yours and mine posts/exchange have helped someone seek the proper advice/guidance.

#142 Evangeline on 12.05.09 at 11:38 am

#138 Tony
((As for raising the capital gains tax chances are they’re likely lower it following what i think will happen in America in the next year or two.))

Please tell us more.

#143 Elizabth on 12.05.09 at 7:21 pm

The only thing I know this is a great country, there are lots of people who work very hard and there are those who work not as hard as others due to mental or other type of disabilities, and than there are the lazy once who just don’t want to work because they can afford to live reasonable ok providing we all work for them and pay taxes…every country has its loosers, and I truly believe that Canada is the greatest country we all could live in — so lets get optimistic about the economy, about savings, about housing and about our politicians –life is fast paced, and we all have to keep up with the trend, technology and life in the 21st century….

#144 dave from Oakville on 12.06.09 at 3:59 pm

#78 DaBull

Anyone can start a corporation for $100 or so. There is no requirement for the number of employees.

Anyone can work on a contract bases under your corporation and if corporate taxes go to 0% you will definintly see a flood of people going this route as a tax haven. Actually they already are now with the corporate tax dropping as it is. Purchase everything you can through your business and pay yourself as little as possible to keep all your business earnings in your corporate tax shelter.

#145 Taxpayer like you on 12.06.09 at 7:43 pm

144 Dave

I have to caution people about creating a small business
corp. It doesnt help you avoid taxes in the traditional sense. Sure you can write-off things like vehicle, cell phone, computer, office supplies, but make sure you’ve used them substantially for work lest the CRA come calling. The problems hit when you try to pull money out of the corporation. Its either a wage or a dividend. Wages of course are taxed as such, and dividends taxed in such a way that the corporate tax plus the dividend tax equals the wage tax. The biggest advantage I’ve found so far is the ability to smooth out the business cycle by pre-paying tax at a lower rate and creating a shareholders loan. And be prepared to pay an accountant and lawyer about $2K per year for the baggage that comes with it.

#146 dave from Oakville on 12.07.09 at 1:24 pm

145 Taxpayer like you

Although I myself am not running a business like this. I do know many that are.

But clearly one major advantage is not to be paying the government income tax the minute you get paid. The longer you postpone parting with your hard earned money the better. You can invest it and pay the taxes at the end of the year. As a full time employee, if you are constantly overpaying your taxes and thus get a refund at the end of the year, you can have your HR people have the income tax amount adjusted on your pay. However, through the excess paperwork involved the good old cdn gov makes this virtually an impossibility and don’t even think about removing the tax deduction completely on your pay in the hope to pay it at the end of the year.

From what I hear many are able to virtually eliminate paying income tax completely or at least no more than 20% by creating a corporation. But with everything who knows if the CRA will come calling years done the road. Your only saviour is the time limitation they have to reassess your return.

If you want to be creative hire your low income family member as well to reduce overall income tax %.