The gap

Budget day. Hardly a surprise. More spending. Deficits stretching far into the future. The Moister Homebuying Strategy (yes, shared-equity mortgages, bigger RRSP withdrawals. More debt). And a major attempt to change the channel from the Lavalin mess.

It’s an election year, of course. The Libs have been rocked by defections – the latest coming this week as the top bureaucrat, Michael Wernick, put his tail between his legs and scat. But will voters overlook it all, sopping up the government goodies, such as the Canada Child Benefit and the real estate relief?

Meanwhile every Trudeau budget gets us a little closer to an historic tax imbalance. Already 40% of families pay no net tax. The TFSA shelter was gutted. Private corporations used by entrepreneurs and professionals have been whacked. A new tax bracket was created to sponge higher income-earners. More is being taken from fewer. And yet the wealth divide grows. Maybe more tax and more spending ain’t the answer.

More on that in a minute. First read this letter from Cam. Partially in response to yesterday’s blog.

On the morning of my 49th birthday, I thought I might share a personal anecdote on a different perspective on 1%’ers (of which I am one).  By no means is this meant as a bitch/whine session, I am very grateful for the position in life I am at, but I will emphatically state that I have earned it, it did not fall into my lap.  I grew up in a one-income family where my father was a civil servant.   I did not know what university was until I was 16 years old, and all of my high school peers were talking about where they were applying after they finished high school.  I was fortunate to be opportunistic in nature, and climbed aboard when this thing called the Internet arrived while I was trying to figure out career paths.

People seem to have this impression of 1%’ers who are millionaires, or billionaires: out-of-touch elites smirking smugly from the comfort of their chauffeured Bentleys.  What they may not realize is that those of us who are just on the high cusp of the top tax bracket are very likely your next door neighbors, struggling with the same life decisions, but bringing home the same or less income than you, because of taxes.

I make 300K a year.  My self-employed wife makes about a third of that.  We live in a modest house just outside the GTA.  1700 square feet.  Nice deck (that I built myself).  Charcoal barbecue.  Leased F150 in the driveway, and the wife drives a Ford Focus.  We have two kids of University age, and two sets of aging parents, one set of which is ill and ailing, and didn’t plan for their retirement.   Hearing aids and dentures are hugely expensive, as is time lost when one of us has to take a day off to drive two hours each way to take them to a specialist appointment in the city.  But it’s family, it’s what you do.  No gripes, just life.

I’ve enclosed my most recent pay stub summary to show people that even though it SOUNDS like a make a lot of money, I really don’t.  This is my gross and net after the first quarter of 2019.  It’s somewhat inflated, because I got my Q4 bonus from last year paid out, and Q4 is always the biggest quarter of the year for revenue in my business.  That was a $33K bonus, of which about $13K actually went into my bank account, after taxes.  Which, by the way, covered not quite 2/3 of the cost to replace the 25 year old windows in my house.

But regardless, the differences between gross and net continues to stagger me.  Are we living high on the hog?  No way.    Yes, I would say we are living a comfortable middle-class existence, where I have a decent retirement savings strategy such that I’m not that worried about retirement.  There is a HUGE difference between somebody who makes 5 million a year, and has to cough up 53% tax, because they still have $2.4 million a year to live on.  But when you have someone who is making a salary that just edges them into the top tax bracket, I’ll bet they are hard pressed to actually bring home $100k per year.  In the GTA, that’s not an excessive lifestyle.

I know there will be lots of people who will complain about this note, about how they can’t afford groceries, or how even having two cars is a luxury.  I am a liftetime left-winger politically, and I was there too once, clearly recalling standing in a Shopper’s Drug Mart in 1996 trying to decide between diapers and eggs (diapers won).   I also decided (at that time, right then and there) that that would never happen again, and I got busy.   I know I am in a privileged position.  I know I have to pay my fair share, and I’m happy to do so.   But with every federal budget that comes down, it feels more and more unfair.

I never expected the government to pay for my existence, and I don’t berate them for it.  But every dollar of income that they tax is one less dollar I have to spend in our economy.  And it’s getting out of control.

Cam’s quarterly stub summary is this: Gross pay $91,803. Net pay $38,309.

At this point it might be worthwhile to define what a Canadian 1%er is. Yes, Cam and his wife qualify with a household income of about $400,000. In fact earning $280,000 or above gives more cash flow than 99% of the population. By this definition, there are 271,000 Canadians who are 1%ers. But there’s another measure, which is net worth. To be in the top group by virtue of wealth means having $1.27 million or greater in investible assets (liquid, not tied up in real estate equity). In a population of 37.6 million, there are 298,000 people in this position (or 0.8%).

Why do so few make it into the latter category? They stick all their net worth into a single thing, at one address in one city, taking on considerable leverage to do so. No diversification. No income. Recurring costs. More risk. High transaction charges. Yes, the potential of tax-free gains, but in most markets at far lower historic averages than financial assets.

The other reason is tax. The Fraser Institute (yeah, I know, right-wing blah blah) has found that of 61 jurisdictions in North America – 51 states and 10 provinces – the ten highest tax rates are here. Earn more than $210,000 and (in seven provinces) face a marginal rate of 54% or so. The top US rate, by the way, clicks in at US$510,300. Of the 34 top industrialized nations, 27 have lower taxes than we do. It’s also a truism the more you tax people, the greater is legal tax avoidance, diminishing returns (this constitutes a big part of what financial advisors do, sadly). Meanwhile high tax renders us uncompetitive, dampens the economy and makes people think twice about doing stuff. A typical statement now heard among doctors: ‘why not work part-time and make the same after-tax income?’ So, people have less health care available. Who wins?

As stated, four in ten families pay nothing. But everyone wants more. So added spending comes from deficits/debt or tax on the remaining citizens. These days almost two-thirds of all income taxes are paid by just 20% of us – who earn less than half the money. So much for fair.

Anyway, it’s budget day. Higher taxes on stock options. Endless deficits. More spending. Where do I get one of those yellow vests?

276 comments ↓

#1 NotLegalAdvice on 03.19.19 at 4:28 pm

First!!

What’s the best ETF for REIT in Canada? How much of my portfolio should include an REIT?

#2 Red_falcon on 03.19.19 at 4:28 pm

Budget day and elections!!
And um, first!!!

#3 Paul on 03.19.19 at 4:28 pm

I’m sorry…I started laughing at $300k a year and still whining. https://www.cbc.ca/news/business/oecd-tax-rich-social-security-1.5062441

#4 Captain Uppa on 03.19.19 at 4:30 pm

>>Anyway, it’s budget day. Where do I get one of those yellow vests?>>

There is this place us poor,one asset owning, lightly taxed ingrates go called Walmart. I’ll buy you and Cam one given your dire financial situations.

#5 Paul on 03.19.19 at 4:35 pm

Yes, my son has a great job works hard puts in his hours.
When overtime or weekend work is offered he could use the money but taxes take so much he turns it down. You would think work longer get ahead doesn’t work that way.

#6 Smartalox on 03.19.19 at 4:36 pm

Won’t doctors working fewer hours ultimately translate in to having more doctors, increasing competition, and ultimately pressuring wages lower?

Also, I’d go easy on the Doctors. Most spend money like idiots, buying luxury items new and funding a lot of depreciation – then reselling those items once depreciated, and buying more.

Generalize much? – Garth

#7 AGuyInVancouver on 03.19.19 at 4:40 pm

Boo, Morneau gives us a federal interpretation of the BC Liberal’s failed first-time homebuyers scheme. All it will do is drive up prices at the lower end of the market.

#8 Paul on 03.19.19 at 4:41 pm

Shared equity mortgage??? Where have we heard that before.
Hate to say it Uppa,Uppa,Uppa,

#9 expat on 03.19.19 at 4:50 pm

#6 Smartalox says Also, I’d go easy on the Doctors. Most spend money like idiots, buying luxury items new and funding a lot of depreciation – then reselling those items once depreciated, and buying more.

I’ve moved from Canada into an enclave in Florida with many Canadian doctors who moved here as well.

I can assure you they are weathy becuase they save their money, invest into different asset classes and grow their assets.

Your generalization is right from Trudeau’s playbook that he needs to wipe out this class.

They create wealth and opportunity for themselves and their families. They work on average 80 hour weeks providing a valuable service which they paid dearly for in terms effort and cost and brainpower to be good at.

Wealth and great ideas are not evil
Trying to find excuses and tax schemes to steal it is the true evil

#10 Bob on 03.19.19 at 4:51 pm

Your numbers don’t add up. The effective tax rate on $300K in Ontario is 40.93%. If Cam’s quarterly gross is $91,803, then his net should be $54,288 for a yearly take home of over $200K (before deductions and not considering investment income).

Not my numbers. His. A big bonus in one quarter would certainly alter his net. – Garth

#11 Semi Retired Conservative on 03.19.19 at 4:54 pm

poster #1. I would say ZRE if I had my choice. I personally hold VRE but would switch if I were starting over. How much ? Personal choice. Depends if you own your own real estate too.

==

Cam. You are a 300K earning left winger.

You’ve been part of the problem. Now you are starting to wake up to the reality of left wing economics and waste. I’m glad they are fleecing you.

You deserve it as the consequences of your actions.

The above comment was edited. – Garth

#12 MF on 03.19.19 at 5:06 pm

lol that letter was a joke.

Start by saying you are not going to whine and complain..and then proceed to whine and complain for 5 paragraphs.

Just who is this guy talking to? I think I can say we all agree with him that excess tax is bad.

Remember only 4/10 Canadians actually voted Liberal.

Anyways, taxes are a universal complaint. I paid thousands last year, and I make a fraction of what this guy makes (I also contributed to an RRSP this year for the firs time to mitigate income taxes spent).

He’s making 300k/year..looks like he’s doing okay in spite of said taxes.

MF

#13 Avi on 03.19.19 at 5:08 pm

Hey Garth,

I started following this blog five years ago, and it used to be about education. Now it’s about ideology. What gives? I was hoping for some in depth analysis on the budget. 400k a year for a family doesn’t get you far, which is the real lesson in the story you presented. Think about how screwed the rest of us are.

#14 MBH on 03.19.19 at 5:09 pm

Garth,

I thought the tax system was progressive, so if you make more money, you pay more tax, but only on the part that is marginally higher? So how does this make sense:
‘why not work part-time and make the same after-tax income?’

#15 Bill on 03.19.19 at 5:10 pm

Something’s fishy here. How on earth does he pay 20K in tax on a 33K bonus? This is a 61% marginal tax rate.

#16 Headhunter on 03.19.19 at 5:10 pm

#5 Paul on 03.19.19 at 4:35 pm
Yes, my son has a great job works hard puts in his hours.
When overtime or weekend work is offered he could use the money but taxes take so much he turns it down. You would think work longer get ahead doesn’t work that way.
_________________________________________
NICE!!!
I’ve said it a million times why? Cause I have them, Kids today have eyes and ears. Way smarter than you think They make look stoopid most of em but they have figured out working is a racket.

Wait until enough of them with no cars no homes no savings no cradle to grave employment… vote in complete Socialism. Equal sharing of misery for all but the gilded class.

#17 MF on 03.19.19 at 5:13 pm

#9 expat on 03.19.19 at 4:50 pm

“They work on average 80 hour weeks providing a valuable service which they paid dearly for in terms effort and cost and brainpower to be good at.”

-Medical school is a privilege that thousands of students don’t get a chance to “pay dearly for”, even though they would give everything for the opportunity. This is because admittance rates are kept artificially low.

Moreover, time in school hasn’t meant anything since 1986. Everyone and their brother has years spent in school now, and the debt to go along with it.

MF

#18 bobo on 03.19.19 at 5:15 pm

# 3 Paul

So how is it fair that a person earning 300K pays 127,000 in tax? When 6 people earning 50K each would pay at most 55K tax ? and that’s assuming they don’t have kids.

300K is far from rich and unless handled properly will not become wealthy.

#19 Shawn Allen on 03.19.19 at 5:16 pm

So, teach the boy some math and finance literacy

#5 Paul on 03.19.19 at 4:35 pm
Yes, my son has a great job works hard puts in his hours.
When overtime or weekend work is offered he could use the money but taxes take so much he turns it down. You would think work longer get ahead doesn’t work that way.

***********************************
But that overtime net pay is incremental cash that could go 100% into savings. Huge opportunity wasted. Sounds like he’s either not thinking correctly or just wants an excuse not to work extra.

And often some of the extra tax on overtime will come back in the tax refund because it is taxed as if it occurs every week (pushing into a higher tax bracket) but at the end of the year the tax bracket is determined by average weekly wages not peak weekly. And CPP is capped at some point during the year if in a high income so higher CPP on overtime effectively comes back.

#20 yvr_lurker on 03.19.19 at 5:16 pm

Indeed the numbers make no sense no matter how you slice it. I think there must be a typo; the net should be around 54K for the quarter, with around 38K hoovered up. If he got a huge bonus in one quarter, I think for the bonus part he would only see 46% of that amount (since he is already in the highest bracket).

The sentiment though I can understand. Making over 220K there is not so much incentive to kill yourself at work to pull in the max possible increase (of about 3%), knowing full well that I get to see about a 200.00 increase each month, with the rest hoovered away. Seems just as important to be very careful on expenditures and try to get some side gigs with extra perks….

Your numbers don’t add up. The effective tax rate on $300K in Ontario is 40.93%. If Cam’s quarterly gross is $91,803, then his net should be $54,288 for a yearly take home of over $200K (before deductions and not considering investment income).

#21 The Wet One on 03.19.19 at 5:16 pm

BTW Garth,

What are the deductions on Cam’s stub?

They probably aren’t just taxes.

On my stub, the deductions include group insurances for health, dental, disability, life and then there’s parking, pension deduction and some other stuff.

Only EI, CPP and Income Tax are actual taxes.

My gross is $96,030 per annum while my net take home is $55,000.

However, taxes only constitute about $21K of the difference. Pension is a big chunk at $13K, and then there’s all the other stuff.

I’d think it’s the same with Cam (depending on his benefits and the like).

In short, simply posting the gross and net as you have above is misleading and arguably dishonest. It isn’t all tax (after all, who pays a 58.3% tax rate? No one. Not even in Canada).

I do note that we do pay some mighty high taxes here as well, and I wish that Trudeau would have kept his spending promises. But, alas, hoping politicos (any politicos) keep their promises is a fools errand.

And now since we seem to have an increasingly white supremacists terrorist sympathizing Conservative leardership (Scheer has been piss poor on this and Bernier is atrocious), well, my choices for one, are being limited.

Some things are more important than money after all.

#22 Ah well ... on 03.19.19 at 5:22 pm

at least we still have 420 to help us get over this.

#23 Smoking Man on 03.19.19 at 5:22 pm

Oh to be a fly on the wall at the next Davos pow wow.
So T2 is going after Stock Options now.

But only specific companies.

#24 BlogDog123 on 03.19.19 at 5:23 pm

Hey I think I went to school with Cam, Mixmaster University circa 1994… Sounds like the same person.

Anyways he’s right. Just look at your Fed/ON T1-General for those nasty higher brackets. If you wanna feel depressed even more look at Nova Scotia provincial rates…

#25 Again and again on 03.19.19 at 5:33 pm

No need to fiddle with the stress test when you have shared equity mortgages that just juiced the market prices by 10%! Oh my, patient and prudent bears just got hopped again. For the 11th year in a row. Ground hog day all over again with this market. Spring is gonna rock for the market! As was predicted here so many times recently. Funny how no one is talking about these stimulative measures

Don’t get too excited. Income and pricing caps on this program, and the equity share is just 5% on resales. – Garth

#26 Lee on 03.19.19 at 5:33 pm

#10 Bob,

I calculate a take home of closer to $175,000.00 before deductions for him – I believe the bonus is part of the $300,000. He may have a spending problem or too much house. He is taking home close to $15,000 a month, not including his wife’s income which probably adds another $60,000 a year or so to the tally (assuming her “1/3 of that” he refers to is in addition to the $300,000, which it appears to be). Even for Toronto this is quote a bit of income. I can see however how he he can be frustrated by paying out $125,000 a year in taxes, not to mention realty taxes, consumption taxes and other tax-related costs. He needs to cut down on expenses. Eating SPAM is fun.

#27 NoName on 03.19.19 at 5:39 pm

This is not trick trick question. Who is mystery man on airplane?

https://youtu.be/skrSif0vhOk?t=793

#28 LP on 03.19.19 at 5:42 pm

Cheez-Louise! Eleven posts in and it’s started already. We are a jealous lot. That’s me finished until tomorrow night when I hope the theme will be different.

#29 Remembrancer on 03.19.19 at 5:42 pm

#5 Paul on 03.19.19 at 4:35 pm
Yes, my son has a great job works hard puts in his hours.
When overtime or weekend work is offered he could use the money but taxes take so much he turns it down. You would think work longer get ahead doesn’t work that way.
———————————–
Kinda short sighted isn’t it? If nothing else sounds like a way to get noticed. Maybe he simply doesn’t need the $$ enough if he’s turning work down or are there different taxes collected on the weekend then the week days I haven’t heard of that make this so unattractive?

#30 Blacksheep on 03.19.19 at 5:46 pm

Budget 2019:

“The budget offers the program, known as the First Time Home Buyer Incentive, as a way to help with housing affordability. The government is earmarking $1.25 billion over three years for something it’s calling a “shared equity mortgage.”

“Functionally, it’s more like an almost interest-free loan — one where the repayment plan doesn’t require any payback until years in the future. In order to qualify, an applicant must have a household income of less than $120,000 per year and be able to come up with a five per cent down payment — the minimum requirement for an insured mortgage with the Canada Mortgage and Housing Corporation (CMHC).

“Precise details of how the program works won’t come out until later in the fall, but today the government provided a rough breakdown of how it might work for a prospective buyer. If a first-time buyer wants to buy a home that costs $400,000, they’d have to come up with a $20,000 down payment, under both the new rules and the old ones.”

“Normally, they’d have to take out a loan for $380,000 to cover the rest of the purchase price — but under the new program (if it’s a newly constructed home), CMHC could kick in $40,000 toward the purchase price, in exchange for a 10 per cent stake in the home.”

“That brings the buyer’s mortgage down to just $340,000 for the home, instead of $380,000. On a standard mortgage at 3.5 per cent interest, that translates into a monthly mortgage payment more than $200 lower than it would have been for the 25-year life of the loan. That’s more than $2,700 a year in potential savings.”
———————————-
“The government also is increasing the amount that a first-time buyer can withdraw from an RRSP, without penalty — $35,000, up from the current level of $25,000 where it has been for the last decade. And Ottawa also will amend the RRSP withdrawal rules to help people who have been through family crises.”

“Starting this year, Canadians who have seen their marriages or common law partnerships break down will be able to participate in the Home Buyer’s Plan, even if they don’t meet the technical requirement of being a first-time buyer.”
——————————–
“The real estate services firm said the seasonally adjusted annual rate of housing starts will fall to 208,550 units this year, and then decline further to 205,050 units in 2020. That’s a two to 3.7 per cent drop from 2018’s 212,843 total units.”
———————————————
“The softening rate outlook will put downward pressure on bond yields, causing fixed rates to drop as we enter the spring homebuying market,” Laird said.

“Overall, this announcement will be helpful to first-time homebuyers looking to enter the housing market this spring.”

https://www.cbc.ca/news/business/bank-of-canada-rate-decision-1.5044828
——————————————-
Been saying it here for 5 years now: “Don’t fight the system” Align your investments with what’s in their (politico’s) best interests, but even I couldnt have dreamed this shite up…

#31 Johnny N on 03.19.19 at 5:49 pm

Hi Garth. What’s the source for the net worth distribution? I have been trying to find that info for a while. Thank you.

#32 My Take on 03.19.19 at 5:52 pm

The above noted family needs some Estate Planning badly, and no doubt there will be some shocking surprises that will surface.

#33 Data Starved on 03.19.19 at 5:53 pm

Any data on who the 2% and 3% are? Curious to know how the next steps down compare.

#34 Michael King on 03.19.19 at 5:54 pm

The dividend tax credit remains, thank goodness. Comes in very handy when filling out my tax form. As for the Liberals cutting the annual TFSA contribution, I will hold my nose and vote Conservative if they promise a sizeable increase. As a senior, it all helps.

#35 Kebo Slice on 03.19.19 at 5:54 pm

I think what this post speaks to is that maybe it makes more sense to tax wealth than it does to tax income. Taxing income disincentivizes hard work.

#36 Debtslavecreator on 03.19.19 at 5:55 pm

For REIT, look into RIT

This budget is a farce but credit for not changing amort or a dramatic increase in the fthb tax credit this junk policy will merely inflate middle class homes in Canadian cities where the average salary can afford to buy now
If you are a RE speculator you should be buying in Windsor, London , Ottawa and other smaller cities
But the recession we are in now will likely accelerate the RE correction in GTA/GTVA will more than overwhelm these silly shared mortgage nonsense
Much ado about nothing for Toronto and GTVA semi and detached
Good buying opportunity coming in these markets late this year or summer next year
You can still plan for a federal election in May of this year
Worst kept secret in Ottawa I hear
If not don’t worry the deepening recession into October makes it very likely liberals will lose or win a weak minority which will neuter them and their ass backward policies

#37 Yanniel on 03.19.19 at 5:55 pm

Sadly, Trump land is becoming more appealing by the day.

#38 When the Whip Comes Down on 03.19.19 at 5:59 pm

#25 again and again – didn’t read too closely did you? This likely won’t do a damned thing to goose the pricier markets. But may well enhance it in others. Bc tried this once before the libs were ditched. Didn’t do much at all and the program uptake was limited.

#39 Catalyst on 03.19.19 at 6:01 pm

One of the worst posts of all time. The part about rich people is that they all think they really deserve it. Alot of people making 40k or 50k and work pretty hard but also go home to a shared rental apartment and shop deals in flyers rather than their home in the burbs. I think we should all be doing better and not just the rich.

The problem is with capitalism and companies needing to have successively better quarters at the expense of the workers and customers. Our banks are a regulated monoply yet suck billions out of the economy every day. Im not saying socialism is the answer, but macron in france is right calling for a wakeup on the long term effects of capitalism and how it is not meeting societies long term goals. Instead of we have individuals with more wealth than enitre countries.

#40 jess on 03.19.19 at 6:01 pm

https://www.motherjones.com/politics/2019/02/billionaires-flooded-republicans-coffers-just-before-the-tax-cuts-passed/

#41 SunShowers on 03.19.19 at 6:01 pm

Don’t get too excited. Income and pricing caps on this program, and the equity share is just 5% on resales. – Garth

——-

Yeah, I don’t see this budget doing anything to house prices or affordability at all. Positively or negatively.

It’s adorable that they bumped the amount people can raid from their RRSP to buy a house. If first time home buyers don’t have money for a down payment, they surely don’t have anything in an RRSP.

#42 TS on 03.19.19 at 6:02 pm

What I don’t get is why keep working then? Wanna stick it to the man on taxes? You can make approximately 50k in Canadian dividend income without paying a cent of tax. Sell your big GTA house, rent, diversified dividend portfolio between you and your wife and voila, 100k of tax free income and no work. You don’t even have to touch the principal and your heirs can do the same thing in perpetuity. Don’t feel sorry for the 1% paying too much tax. They are choosing to pay.

#43 Bezengy on 03.19.19 at 6:03 pm

Mr. Dressup promised 10 billion dollar deficits and then spent double that. Now he says he’ll spent 15 billion year one, and then 20 billion per year if re-elected. Sounds like a 40 billion deficit is heading our way if we re-elect this joker. My calculator says that’s another $2666.66 per year for the top 60 percent. Prepare to pay, or just put it on our tab please.

#44 j.s. on 03.19.19 at 6:07 pm

How exactly does marriage with the government (aka CMHC) work in the shared equity program? I don’t quite imagine…

#45 Nik on 03.19.19 at 6:08 pm

With all nobel winning macro economists that dispense wisdom in the comments section I didnt imagine Cam’s numbers would be this confusing. It shouldn’t be…

Bonus payments are always taxed at a higher rate so its best exclude them from the calculation. For the Quarter the Gross is ($92K – $33K = $59K) and the net is ($54K – $13K=$41K).

Based on this gross and net taxes and other deductions come in at 31% which is not terrible. I am assuming CPP deductions don’t factor in as they are usually done in the first half of the year. As someone already figured it the gross is $236K/year and the bonus has to be part of the $300K compensation.

Stop whining Cam!! if you’d contributed your bonus to RRSP you’d have done much better

#46 Penny Henny on 03.19.19 at 6:09 pm

#159 Shawn Allen on 03.19.19 at 4:42 pm
GIC Income Tax Fact Check on Aisle 3!

#150 Darren Simpson on 03.19.19 at 2:57 pm
We are content with our $480,000 in GIC’s, RRSP GIC’s, TFSA GIC’s at 3.75% compounded for 5 years, March-7-2024 really 4.041% with compounding, $20,200 a year interest, $101,000 after 5 years total interest.

Since we are retired, both retired accountants, we figured we are in a lower tax bracket so with all personal tax amounts, pension tax credit, disability tax credit etc., we get to keep roughly 90% of all our interest, paying only $2,020 income taxes per year or $10,100 total incomes tax in 5 years.

Since we are debt free and don’t have huge debt loads at low and higher rates like most Canadians, we are managing well this way.

Fluctuating investments are not for everyone. I know this comment will be knocked but we only do what is comfortable and right for us. GIC’s fully deposit insured.

This is why accountants are such fun. – Garth

******************************************
That’s impressive but I am skeptical on the claim of a 10% tax rate.
////////////////

Shawn you’re a smart guy think about it.
Basic exemption covers the first $12,000.
Old Age exemption is what? Another $6000.
Lets say they are pulling another $4000 each from TFSA.
So we are already at $22,000 tax free/yr each. $44,000 per couple.
No lets add in another $20,000 each from RRSP, taxed at the 20% (in Ontario).
That amounts to $44,000 each for him and his wife and he only had to pay tax on the last $20,000, which would be $4000.
$4000 tax on $44,000 income. Less than 10%

#47 Rico on 03.19.19 at 6:10 pm

His takehome is likely reduced by:
1. RRSP contributions
2. CPP
3. EI

The first few pay stubs of the new year are always smaller.

#48 Terence Young on 03.19.19 at 6:11 pm

Hi, Garth.

You might want to take a look at comment #11. I think we are beyond using the mental disabilities of others as an epithet to hurl at someone when we disagree with them. I thought we were beyond it decades ago, but clearly not.

#49 JM7 on 03.19.19 at 6:11 pm

Great Opening Picture!!
I thought flowerpot islands at first, only because of the shape.
Looking forward to Spring here, and the greenery!
Thx Garth, your blog always delights

#50 Penny Henny on 03.19.19 at 6:13 pm

Re above, I forgot to add the Ontario Health Tax Premium.
Another $600 each or so.

#51 theoryAndPractice on 03.19.19 at 6:13 pm

https://www.cbc.ca/news/business/budget-cmhc-home-buyers-1.5063204

I think the idea is to boost lower end of the market , they are hoping to have snowball effect towards high end markets. Household income must be lower than 120K and house value must be less than 1M.

120k income at <1m house 200k down payment , 0$ other periodic liablities, brings 638K pre approval in total that can go 838K . As a result the houses up to ~850K is impacted with this move.

There is nothing that can save Toronto and BC housing market…

#52 Reximus on 03.19.19 at 6:14 pm

good news for 1% Elizabeth, she can get a mtg deal on a 600k condo in vyr

#53 Shared Equity Mortgage on 03.19.19 at 6:17 pm

What a load of crock!

Who comes up with this idea to make .gov a part owner of your first home purchase????? Have we now gone completely communist in this country? Why on earth should government (funded by taxpayers!!) have any interest in being co-owner of private residences in addition to offering a sort of purchase insurance to the banks?

Complete bunk and for the optics only. Same with the 10k increase in RRSP withdrawal towards home purchase. Big Whoop.

The stress test is what has put the brakes on the market. Qualifying at double rates or taking out the insurance that’s capped at mortgages of less than a million is the end of the road for the real estate story.

#54 Interstellar Old Yeller on 03.19.19 at 6:18 pm

#21 The Wet One on 03.19.19 at 5:16 pm

I’ll pile on, too, and say Cam’s numbers don’t make sense without further details.

Garth – what’s the income cut off for the top 20%? Curious if we are above or below it.

#55 calgaryPhantom on 03.19.19 at 6:20 pm

When will these new RRSP rules take effect?

#56 Linda on 03.19.19 at 6:22 pm

Well Garth, you certainly called it when you predicted the budget would contain measures to permit the house horny to buy, regardless of whether they can actually afford to do so.

As for Cam, he is indeed receiving the expected envious & less than sympathetic remarks. I agree with his point that those who strive to succeed are being punished monetarily by excessive taxation. How can we expect innovation & investment to flourish under these circumstances? The answer is it does not. Ventures may indeed start due to government support via budget largesse, but many an enterprise only remained open long enough to collect the money.

One last thing regarding the budget – doesn’t matter which party is in charge. They all of them fill a pre-election budget with ‘targeted selection’ promises in the expectation that promised largesse will result in voters returning them to office for another term. Whether any of the promised goodies actually materialize once the election is over is another story.

#57 Reximus on 03.19.19 at 6:26 pm

seems the message in this budget to millenials re: housing is move to Atlantic Canada…which I totally support

#58 The real Kip (Ret) on 03.19.19 at 6:26 pm

Love this country. Canada is the BEST country. To the moaners and cry babies, it has always cost more to live here. Highways stretch coast to coast with less people to pay for them. Same with railways. Healthcare is a right we take for granted.

Don’t like it? Leave. We will actually be better off without all the cry babies!

#59 AK on 03.19.19 at 6:27 pm

“And a major attempt to change the channel from the Lavalin mess.”
=====================================
Not going to do them any good. The Liberals are toast.

#60 n1tro on 03.19.19 at 6:32 pm

“I never expected the government to pay for my existence, and I don’t berate them for it.”

That may be you but 40% of Canadians that don’t pay taxes expect the government to pay for their existance.

“But every dollar of income that they tax is one less dollar I have to spend in our economy.  And it’s getting out of control.”

So are you saying the honeymoon period of Liberal idealism has past your breaking point? How do you think the rest (not including the 40% freeloaders) of us feel?

Still going to vote Liberal because that is what you have always done? Then refer back to your previous statement…

“I know I have to pay my fair share, and I’m happy to do so.”

Only option and still be a Canadian is make more money while being vilified to pay for the rest. The ones stuck in the middle will probably find ways to make ourselves the 40% that don’t pay taxes.

#61 meslippery on 03.19.19 at 6:33 pm

#5 Paul on 03.19.19 at 4:35 pm

Yes, my son has a great job works hard puts in his hours.
When overtime or weekend work is offered he could use the money but taxes take so much he turns it down. You would think work longer get ahead doesn’t work that way.
————-
Lets say $35.00 per hour reg time Monday to Friday for
40 hours. Saturday pays time and a half $52.50 x 53% max = $27.83 per hour cash in your jeans. As a young man I would stock up on easy cash for your TFSA.

#62 Penny Henny on 03.19.19 at 6:34 pm

Hey Cam,
you should be bulking up your RRSP.
Garth says this benefits the rich the most.

#63 akashic record on 03.19.19 at 6:34 pm

Where do I get one of those yellow vests?

No tax, no vote.

#64 Contentin306 on 03.19.19 at 6:35 pm

Don’t be a yellow vester. The movement isn’t the same in Canada.

And I’m supremely disappointed but unsurprised by this budget. It’s short-sighted on too many levels at once.

We need a couple of good minority governments to get better legislation. Those of the 1960s come to mind where we got most of our social safety nets.

For all of Harper’s railing against minorities, they do tend to make better policy in general. Longer lasting, anyway.

#65 Millennial Realist on 03.19.19 at 6:35 pm

All of this is just one symptom of the bigger problem of what started with the Boomer/Reagan conspiracy to lower taxes on the rich, downgrade and privatize public services and erode public infrastructure.

Trickle down BS, stagnant wages for decades, TFWs, offshore assets and precarious work.

Thanks for nothing, Boomers.

Be part of the change.

Or be run over by it.

#66 working class on 03.19.19 at 6:37 pm

My quarterly take home is 7,500 and my gross is 12,500. Care to swap?

#67 Paul on 03.19.19 at 6:37 pm

#18 Bobo

The more you make the more you pay. Always been that way and hopefully always will be. If you can’t make it on $300k a year in Canada then you’re nothing but a greedy loser. So many more do it much less and are super happy.

#68 Troy McClure on 03.19.19 at 6:39 pm

More math ponderings, besides what’s already been pointed out about marginal tax rate wonkiness…

Population of 37.6 million, I calculate that there are 376,000 people that make up the top 1% based on cash flow, rather than 271,000. And, I also get 376,000 make up the top 1% based on wealth, rather than 298,000.

Like Barbie says, “Math is hard.” Or is it, “don’t play ball in the house”.

Enough complaining about math. What gets me is that I can’t see how shared equity mortgages aren’t going to drive up the price of houses. If buyers have more money to spend, won’t they spend more?

We don’t even have enough 1%ers to fill a digit. – Garth

#69 rknusa on 03.19.19 at 6:45 pm

family income is 400K, splits with his wife

200 a piece

Total income $ 200,000
Federal tax $ 43,507
Provincial tax $ 26,756
CPP/EI premiums $ 3,452
Total tax $ 73,715
After-tax income $ 126,285
Average tax rate 36.86 %
Marginal tax rate 47.97 %

WHINER – 252.5K a year net family income

Split how? – Garth

#70 Stone on 03.19.19 at 6:49 pm

To be in the top group by virtue of wealth means having $1.27 million or greater in investible assets (liquid, not tied up in real estate equity). In a population of 37.6 million, there are 298,000 people in this position (or 0.8%).

———

Is that by household or by individual?

#71 Sail away on 03.19.19 at 6:51 pm

Thanks Cam for funding the government. Somebody needs to do it. Now just ensure you’re in a line of work that benefits from government payment/subsidy for a perfect circle.

Consider it job security. Seed money to run the machine.

#72 Bobby Bittman on 03.19.19 at 6:52 pm

Even better idea. Let’s take more of that free budget money and have CMHC pony up 99% of the purchase price. This would reduce my cost of ownership significantly and my CMHC “equity partner” can enjoy a greater stake in today’s reasonably priced Mattamy et al shacks…err…homes. I don’t want to be greedy and take all that guaranteed equity windfall for myself come sale time.

#73 Penny Henny on 03.19.19 at 6:53 pm

To be in the top group by virtue of wealth means having $1.27 million or greater in investible assets (liquid, not tied up in real estate equity).-GT
////////////////

Hey I know it’s not you Garth but this is a stupid definition.
I have 1.18mm plus 420,000 house. Not top group.
I sell house, spend $300,000 on hookers and am left with no house but $1.3mm invest-able. Now I am top group (and happy)

#74 In other news... on 03.19.19 at 6:54 pm

I make 300K a year. My self-employed wife makes about a third of that. We live in a modest house just outside the GTA. 1700 square feet. Nice deck (that I built myself). Charcoal barbecue. Leased F150 in the driveway, and the wife drives a Ford Focus. We have two kids of University age.
———————-

In other news, the budget gets some Indigenous people clean running water !!!!!!

#75 Headhunter on 03.19.19 at 6:56 pm

#5 Paul on 03.19.19 at 4:35 pm
Yes, my son has a great job works hard puts in his hours.
When overtime or weekend work is offered he could use the money but taxes take so much he turns it down. You would think work longer get ahead doesn’t work that way.
———————————–
Kinda short sighted isn’t it? If nothing else sounds like a way to get noticed. Maybe he simply doesn’t need the $$ enough
___________________________________________
LOVE this comment as the bastard child smokey would say spoken like a true tax slave. Get noticed? work your way up? Things we had easily and kids today just dont.

Get noticed? Head office most likely not in canada good jobs go to family and friends

AI taking my job? Some guy in “insert country here” perhaps. I still think im 21 so I totally get where this kid is coming from. Enjoy life

#76 rknusa on 03.19.19 at 6:58 pm

oops thought you could split income up there

ok based on two separate income not much difference

Total income $ 100,000
Federal tax $ 15,842
Provincial tax $ 8,566
CPP/EI premiums $ 3,452
Total tax $ 27,860
After-tax income $ 72,140
Average tax rate 27.86 %
Marginal tax rate 43.41 %

Total income $ 300,000
Federal tax $ 76,274
Provincial tax $ 47,123
CPP/EI premiums $ 3,452
Total tax $ 126,849
After-tax income $ 173,151
Average tax rate 42.28 %
Marginal tax rate 53.53 %

still works out to a famly income of 245,300

minus an extra 3452 in SCPP contrbutions for self employment however I am sure she is writing off 10K+ in self-employed expenses – e.g. home office, leased truck?

dentures? hearing aid? cry me a river

#77 Dolce Vita on 03.19.19 at 6:58 pm

Lib Budget:

We’ve lost a chunk of the 2015 Millennial vote, we’re scared shitless of losing the election so we’re spending MORE than ever by giving EVERYONE else money hoping that’ll make up for the slack.

You name it, we spend on it.

And to make sure the Indigenous don’t grab anymore headlines, $8.5 Billion more (if you can’t Reconcile, buy Compliance).

SNC what?

PS:

It’s cast in concrete we’ll balance the budget by 2023…trust us.

PS PS:

No more Bank of Ma & Pa needed for that down payment, it’s the Bank of CMHC instead.

#78 Semi Retired Conservative on 03.19.19 at 6:59 pm

Terence Young: sorry, did I hurt your feelings ?

Are you yourself mentally challenged ?

Or are you a leftist ?

But then, I repeat myself.

#79 AK on 03.19.19 at 7:02 pm

“But there’s another measure, which is net worth. To be in the top group by virtue of wealth means having $1.27 million or greater in investible assets (liquid, not tied up in real estate equity). In a population of 37.6 million, there are 298,000 people in this position (or 0.8%).”
====================================

How accurate is this statistic? Is it determined by a survey. ?

#80 Gregor Samsa on 03.19.19 at 7:03 pm

This is a desperation budget. The wheels are coming off the housing gasbag and this is a desperate attempt to keep it going long enough for the Liberals to regain power. Harper was doing the exact same thing. Everyone is just kicking the can down the road, pretending that $1M homes are normal and affordable in a country where the median household income is $70K before taxes.

Take away the $20B/year deficits propping up the economy (and now also propping up the housing bubble) and the economy goes into a deep recession. Only a matter of time.

#81 Doghouse Dweller on 03.19.19 at 7:09 pm

Where do I get one of those yellow vests?
————————————————-
The yellow ones are hard to find here in North America, we get mostly orange and florescent lime at Princess Auto.

Your in luck ! looks like they got a new shipment .

https://www.princessauto.com/en/search?Dy=1&Nty=1&Ntt=safety+vest

#82 the ryguy - In cabo on 03.19.19 at 7:16 pm

#11 Semi Retired Conservative on 03.19.19 at 4:54 pm
—————————————————————-

More of this guy please :) :)

#83 Shawn Allen on 03.19.19 at 7:26 pm

Apparently then, RRSPs Rock

Penny Henny responded to me:

Shawn you’re a smart guy think about it.
Basic exemption covers the first $12,000.
Old Age exemption is what? Another $6000.
Lets say they are pulling another $4000 each from TFSA.
So we are already at $22,000 tax free/yr each. $44,000 per couple.
No lets add in another $20,000 each from RRSP, taxed at the 20% (in Ontario).
That amounts to $44,000 each for him and his wife and he only had to pay tax on the last $20,000, which would be $4000.
$4000 tax on $44,000 income. Less than 10%

*************************************
Agreed that could work if they have no other income. No old age pension and no CPP and no employment income. (So not sure about the old age $6000 exemption…)

But it does illustrate how someone might be getting money out of an RRSP at 20% tax. $20,000 per year each. Not bad. And they no doubt got tax refunds in the order of 30% or more when they made the RRSP contributions meaning they only paid 70 cents net on each dollar contributed to the RRSP. This means they are effectively paying negative tax on their RRSP money. The government tax refund funded 30% of the RRSP and now as it grows they only take 20% back on withdrawals!

It’s like having an investment partner who puts in 30% of the money but only wants 20% of the principal and growth back over time!

Math may be hard but it should be clear that negative tax on this RRSP beats the zero on a TFSA!

An exemplar use of the RRSP for its intended purpose; retirement. No need to twist in knots to “melt down” this RRSP if the taxable incomes are going to remain under $44k each. $44k each in retirement is way better than average but quite below what most on this blog are headed for I hope.

#84 crowdedelevatorfartz on 03.19.19 at 7:29 pm

@#12 MF
“Remember only 4/10 Canadians actually voted Liberal….”
+++++

And 4/10 Canadians dont pay tax…..coincidence?
I think not.

#85 Kurt on 03.19.19 at 7:31 pm

Garth: BDO says top combined marginal rate in Ontario is 54%, but Cam is reporting over 60%. How does that happen? Is there something hidden somewhere?

#86 crowdedelevatorfartz on 03.19.19 at 7:34 pm

@#26 Lee
“I can see however how he he can be frustrated by paying out $125,000 a year in taxes, not to mention realty taxes, consumption taxes and other tax-related costs.”

*****
And there in lies the rub.

I have a friend who made $280k one year and paid almost 90k in taxes.
He said “f- it! I dont need the stress. I dont need the hassle of work to watch the govt bend me over a barrel”

He went on stress leave and tapped an insurance company for 3 years.

Well done govt.

Another pup to suckle on the govt teat.

#87 tccontrarian on 03.19.19 at 7:37 pm

“Earn more than $210,000 and (in seven provinces) face a marginal rate of 54% or so.” GT
——————

So, if you ‘earn’ $300k from (employment) income and you’re taxed at the 54% marginal rate, you’re left with about $138,000.
Now, if you ‘earn’ $300k from Capital Gains (in non-registered accounts), you end up with about $220k (as ‘only’ 50% of your gains are taxed at your marginal rate). That’s a whopping 59.4% more in your pocket!!

That’s probably the biggest reason why I’ve sought to make most of my ‘income’ via investments.

Of course, it only gets ‘better’ when you factor in gains from TFSA accounts, (and RRSPs, although these are deferred taxes and not avoidable forever). Still…

TCC

#88 CEW9 on 03.19.19 at 7:38 pm

Wow, what a budget! And not in a good way…

CMHC is going to get in the real estate ownership business? Did I read that right?

They are proposing to purchase a 10% stake in first time homeowners residences, and the recoup their 10% stake when the owner sells? That’s what shared equity means??

Talk about a conflict of interest. The feds now have a real stake in keeping the bubble inflated. Thing with bubbles is that eventually they pop.

I am actually speechless. Like wow. What are they thinking?

#89 Ray Skunk on 03.19.19 at 7:39 pm

So much hate for Cam.

Don’t worry buddy, I’m in the same boat and I feel a lot of the silent blog dogs are.

Gross income just about puts me in the 1%. Assets and savings are certainly not 1% material. Easier to tax at payroll source than go after RE holdings, Panama-paper offshore accounts, Trust Funds, French Chateaus, etc.

If you’re envious and want to swap with Cam and others, why don’t you? Hell, the Libs even created training program benefits in this budget just for you. A couple of degrees later, and five-or-seven years of 65-hour-weeks, and maybe you can join us?

Otherwise, get yourself a run-of-the-mill Public Sector job. You won’t get into the 1% income-wise, but you’ll sure as hell will have a 1%-er pension pot if you get in early enough. Something I can guarantee Cam doesn’t have. I certainly don’t.

#90 Windsurfer on 03.19.19 at 7:39 pm

Garth – I expect an honest answer. Wernick had apparently been in his job through several governments including Harper and earlier. You would have met him during your tenure. Was he an honest sort or a crook? Has he given his resignation now in 2019 because the system has become untenable for career civil servants thanks to the desperate CON’s?

#91 espressobob on 03.19.19 at 7:42 pm

#1 NotLegalAdvice

Call Garth. Why torture yourself?

#92 Shawn Allen on 03.19.19 at 7:43 pm

RRP 10% tax…

Actually Penny is talking about pulling I guess $40,000 each from RRSP (unless there is some other income of $18,000) In that case amount up to the personal exemption is coming out tax free.

But you need a Very large RRSP to pull out $40k. $1 million each would do it.

Goes to show say a couple lawyers or doctors making max RRSP contributions over $20k per year each. No pension then they get to pull out a total of $88k in Ontario at very little tax. But then how could they live on $88k?

But if they are doing only $20k each from RRSP they have a good tax situation.

For government workers the pension way more than uses up the basic exemption room and usually pushes the RRSP with-drawer into higher tax brackets. Have pity?

#93 tccontrarian on 03.19.19 at 7:45 pm

I forgot to mention that I’ve often stated as my investment ‘target’ of sorts…

to be dinged > $1,000,000 in Capital Gains taxes one year (while the inclusion rate is still at 50%)!

Won’t be this year or next, I’m afraid.

TCC

#94 crowdedelevatorfartz on 03.19.19 at 7:46 pm

@#39 catalyst
“The part about rich people is that they all think they really deserve it.”
*****

You’re missing the point.

Is it FAIR that someone making 300k should be taxed at 53%?
How would YOU like to have 53% of YOUR cheque taken off in tax?
Your 40k income is now 20k.
Fair?
Hardly.
I would imagine you would be squealing like a stuck pig.

Anyone making 300k has probably years of expensive university behind them OR years of hustling to get to the top of their game.

And then the govt taxes the sh!t out of them.
It doesnt work.
Wealthy people can move, hire very good accountants to move the money OR they just step out of the rat race and relax with the money they have.
Do the 40 % of non tax paying “Can’t-nadians” realize the golden goose has almost been plucked of feathers?
No?
Dont care?
You will when the govt changes leaders and the social experiment ends……

#95 Martin on 03.19.19 at 7:49 pm

This may have been mentioned already, took a skim through but didn’t see; frankly the comments section frightens me a little. But is it me or might a blog on marginal tax rates be a useful reminder for people? Case in point “but bringing home the same or less income than you, because of taxes.” The idea that you can earn less by bumping yourself into a given bracket seems quite common when people discuss taxes (see also your comment about doctors working part-time). Yea you can get some wonky numbers on bonuses and OT but in the end your still ahead. Whether that rate is fair or rewarding is another story.

A dollar earned, even at 53% tax, is still better than $0. Great blog Garth!

#96 JD on 03.19.19 at 7:50 pm

Mr. Omniscient: as is said above, #11 calls for the delete (or at least edit) button. You’d think it’s at least disrespectful if not worse to use the word retard so casually. And I’m not being PC in the least, not here and not elsewhere ever. Mental disability is of a kind that anyone including the commenter may experience at some point in life. Perhaps only then he may realize it warrants some respect?

#97 Missed One! on 03.19.19 at 7:52 pm

Hi Garth! Daily reader! Thank you for the time you put in, Ive learned so much from your efforts.

Just wanted to draw your attention to post #11 – Not at all constructive with unfortunate language. Hit that delete key! :)

March 21st is World Down syndrome day! We could all learn a thing or two from people with Down syndrome about loving others and speaking with kindness.

Maybe a picture of Bandit wearing crazy socks on the 21st is in order!?!

Thanks again for your thoughtful posts, and to all that take the time to contribute respectfully to the comments section. I learn so much from my daily visit here.

#98 RH on 03.19.19 at 7:54 pm

Only 4 in 10 families in Canada apparently pay tax. The other 6 of out 10 subsidize them. I’m in that 6 with a very decent earning and don’t mind taxes (don’t love them). I would rather help people and pay more taxes. It’s a moral obligation – to those more is given, more is expected. The money goes to things that help people. From special schools to community centers and health. Roads to get to those places. Etc etc. Its not all dire :) Snowflake Power!

#99 Last Canadian Standing on 03.19.19 at 7:54 pm

Run, Run , Run for the Border & Fast – the ice floe called Canada is melting. Foreign investment fleeing and spo are baby boomers etc. right along with them. No one can afford to live in Canukistan any more. Let the Millenial pinkos have it. Time to blow from the Canadian pop stand and head south like the others who were sick of all levels of Governments in Canada eating their lunch!

#100 down and out on 03.19.19 at 7:57 pm

#58 electric cars do not pay gas or road tax for our sea to sea highways and now a rebate to own one .Oh boy the cost of gas to make up for lost revue (road tax) has to come from somewhere ,just imagine if only 10% of vehicles are electric the price of gas will parallel to rise of cigarettes taxes if lefties have their way.

#101 Mike Martins on 03.19.19 at 7:58 pm

Yewwwwtubers:

National money laundering task force in budget 2019.

About $200 million in funding aimed against laundering and tax evasion, especially in Vancouver RE and Toronto RE, B.C. casinos and trade-based laundering.

#102 PastThePeak on 03.19.19 at 8:01 pm

#15 Bill on 03.19.19 at 5:10 pm
Something’s fishy here. How on earth does he pay 20K in tax on a 33K bonus? This is a 61% marginal tax rate.
++++++++++++++++++++++++++++++++++++

Couple of possibilities:
– Company might consider the bonus to be on top of salary even in Q1, and so it hits the top marginal right away (53.5% in ONT)
– Being in Q1, also gets hit with all the payroll taxes (CPP & EI) on said bonus (that is how it was done to me if ever got bonus or sold stock options in Q1, so huge payroll tax hit upfront – but then done for the year).

So that much tax hit is not representative of all quarters.

I will repeat what I wrote yesterday, which applies to about 90% of the commenters here. The new Canadian motto:

“Anyone who makes more money than me is rich, doesn’t deserve it, and should be heavily taxed to pay more of their fair share.”

No doubt all you hard working geniuses will be complaining as Canada’s uncompetitive economy rolls over further.

#103 Reality is stark on 03.19.19 at 8:01 pm

They loved taxes at the Boston Tea Party. Is it really worth it to fight against taxation?
If the public service increases their wealth by living longer and collecting more from the taxpayer isn’t that better for everyone?
Social justice warriors want higher taxes to fund their needs. We need to learn to give to groups who want money for what they deem to be relevant causes for them. That is how we will all prosper as Canadians.

#104 PastThePeak on 03.19.19 at 8:04 pm

#12 MF on 03.19.19 at 5:06 pm
lol that letter was a joke.

Remember only 4/10 Canadians actually voted Liberal.
+++++++++++++++++++++++++++++++++++

And remember, as I have replied to this before – that another 25% voted NDP / Bloc / Green – which are more left than the Liberals (at least in theory).

So 65% of Canadians typically vote for left-wing parties. Your continual attempt to paint only a minority of Canadians as voting for redistribution fails.

#105 Castle contracting on 03.19.19 at 8:05 pm

I made 500k last year, 100k for office expenses, paid myself 60k, I live cheap. I then paid corporate tax on 340k which is about 12%. It doesn’t pay to be an employee making 300k per year

#106 BatOutOfHeck on 03.19.19 at 8:06 pm

Does anyone else tire of not being able to reply or respond to posts directly within the same thread? What a colossal waste of time. Turn on “threaded comments” on this pathetic blog… Perhaps Garth fears that others may take away from the focus and attention on him! Going forward, I’m just coming here for the best pics on the net … then maybe the wallowing diatribe .. but not the comments. Got better things to do with my time than respond to comments that will most likely never be read … et tu, Brutus?

#107 Keith on 03.19.19 at 8:13 pm

4 in 10 Canadians don’t pay income tax. So you’re not subsidizing them, you’re subsidizing employers and occupations that used to pay better than a living wage, or a living wage, and no longer do.

You could pay enough for your consumer goods for retailers to pay a living wage like they used to, or you can have cheaper goods and higher taxes to subsidize a low salary, low wage, shrinking middle class economy.

It’s the way of the world. We are all connected. There is no free lunch in economics. What gets taken away from one worker, will be subsidized by someone else. If you have adult children in their mid twenties or older living at home in the basement, working and living rent free, congratulations. That’s another subsidy that didn’t exist in large numbers back in the day either. You are paying twice.

You’re paying taxes for a low wage, low salary, overeducated, overqualified workforce. The real hits are yet to come, when employment in retail and driving for a living largely disappears, and a population without a pension and lower wages isn’t able to work into old age. What employers used to pay for, has to be paid for by someone – in Canada we tax where the income is.

#108 saskatoon on 03.19.19 at 8:14 pm

if taxation is unfair (i.e., morally wrong) at 51%…then it is always morally wrong.

if something is immoral…it doesn’t matter what the frequency is.

murder is wrong the first time…and the tenth time.

accordingly, taxation is wrong at 51%…it is also wrong at 10%…and everything in between…and beyond.

#109 MarcT on 03.19.19 at 8:18 pm

This guy is basically me expect for different number of kids, and wifey is stay at home. I pay an effective tax rate of 39%. Almost 4 out of ten dollars gone. We have no DB plan so load up the DC plan, thats another 14% and I’m still not sure it will be enough.

Live in a B market. 40 year old home, bit of a fixer upper. One car family, a ten year old pickup. Do have a few toys – a small boat and a tracktor – and hobbies but nothing too crazy. Wife spends almost nothing. A trip south every two years, phoenix or florida once a year and lots of camping.

We live an amazing life, and I love Canada, but we are not rich. Not even close. Almost 6 of ten dollars I earn are required to fund gov’t and hopefully a decent retirement. The rest goes to housing, food, gas, basic necessities. A few K play money each month that gets allocated to travel and hobbies. Probably should go into saving but whatever.

I suspect that guys like Cam and myself are the well that will continue to get tapped for tax revenue. We have no advocacy group like docs or RE agents, and are an easy target. They added the 53 percent bracket, gutted tfsa and killed income splitting. All of which target high earning salaried employees. Outside of rrsp maximums we have no tools to reduce income. We get income tested out of new benefits.We are the gift that keeps on giving.

#110 Retired on a Gulf Island on 03.19.19 at 8:18 pm

I have read this blog almost every day for 6 years. I manage most of my portfolio of ~$4,000,000 of investible assets, and most of my working life my income was in the 1% class according to the definition you cited.

I have learned a lot from your blog, so thank you.

What I learned today from reading the comments is that a high percentage of people who write comments are losers. As soon as you disclosed that today’s example earned $300,000 a year, their brains seized up with jealousy and the rest of the piece was lost on them.

I will go back to just reading the blog and ignoring the losers.

Another great article, by the way.

#111 unbalanced on 03.19.19 at 8:18 pm

The kid does not want to work overtime because he is at the foremans house spending time with his wife.

#112 not 1st on 03.19.19 at 8:22 pm

Best to keep it brief. This budget and this govt are a complete joke and a parade of juvenile imbeciles. These guys couldn’t run a lemonade stand.

There is a forecast floating around unofficial circles predicating a 60c loonie because Canada is full on socialists stupid and banana republic. We have no real borders in this country but Trudeau just trapped you behind an economic wall just the same. No one in their right mind will ever invest here. We will have one industry selling overpriced RE to each other and propping up redistribution schemes.

#113 Gattu on 03.19.19 at 8:23 pm

After making the decision to immigrate to Canada, we delayed our arrival by 3 years. Best financial decision of our lives, extending two professional salaries in a low tax country at the peak of our careers for just that bit longer. We crunched the numbers, and figured it made very little sense for my wife to work in Canada, considering taxes and childcare expenses. Canada is less than ideal to build networth, but a fair place to live once said networth has been built. We don’t save much these days (never expected to), but lead a comfortable life in a quality city.

#114 TimeInABoddle on 03.19.19 at 8:23 pm

I’m thinking yesterday’s picture should be nominated as the “best picture” of the year award .. maybe of all time. Thoughts?

But what I really wanted to say … go ahead and vote for a government that pushes Canadians further into debt. Reality is that going forward, I will minimize my income taxes. Relatively easy to do as a retiree with a long horizon. It will be YOUR children that will inherit the mess. Why would I care for one minute to try to pay down the national debt? I won’t be around to reap the rewards anyway … and don’t have any progeny to inherit the tax burden… so Mr. Socks and your 2-faced money-bagger … spend like there is no tomorrow! People live in the “here and now” in their personal lives … why would there elected government be any different?

** in case you were wondering, which you weren’t … Boddle – A former Scottish copper coin of less value than a bawbee, worth about one-sixth of an English penny.

#115 Loonie Doctor on 03.19.19 at 8:31 pm

It makes perfect sense for people who don’t spend everything to cut back work if they have the option when they hit a marginal tax rate where another hour worked isn’t worth the money compared time spent with family or looking after your physical or mental health. I am fortunate to be in that position and over 50% marginal tax with limits on saving too much was the tipping point for me. Have been scaling back annually since 2015. I now average 40h/wk. There are now unfilled undesireable shifts where there weren’t before, but no point in martyring myself or my family. Perhaps more docs will cut back (I know many who are making this deliberate weighing of their time vs money). If they train more docs then that is ok (even good since healhier docs are better). I am not sure whether the government will make that investment though until forced. I’ve seen that movie before.
-LD

#116 How to have more disposable income on 03.19.19 at 8:35 pm

Garth often alludes to (read: mocks) Kias on this blog. If you want more disposable income, simply trade in your fancy Ford/Lexus/3km per litre SUV and get yourself into a Kia. You will notice an immediate increase in your cash flow from the lower payments and insurance. Who cares about the Joneses?

Disclaimer: I am not a Kia salesperson. I do however lease a Forte for $225/month and it’s shiny and gets me where I need to go and the extra cash goes into a beautiful ETF…all while my butt is kept warm…that or I just need myself!

#117 Bigrider on 03.19.19 at 8:38 pm

uppa Uppa UPPA she goes for the RE market. Once again, the obsession with RE continues ,even at the policy level, as we plumb new depths of depraved social engineering as we alleviate risks of ownership for the wanting class.

I may add, that your response Garth the other day to mine of ‘downa, Downa DOWNA can very easily be applied to the equity markets as more risk for reward will be met with more future taxes ,(so why bother), not to mention the increased rape and burning of retirement assets through HBP.

Should have listened to nonno and the old boys. Bricks and mortar baby !

#118 Mr Canada on 03.19.19 at 8:44 pm

40% of the people in Canada do not pay any tax but benefit greatly from the system. I propose we should have a minimum “contribution” tax …I wonder if I could get elected on that platform ?

#119 the flying dutchman on 03.19.19 at 8:45 pm

I’m trying to unpack this home buyer incentive plan, but to me, this seems like it will have minimal impact on the house markets in the most bubbly areas (a big nothing burger as I’ve seen other posters mention)

If we assume a stress test rate of 5.14%, and essentially no other debts, a couple making $120K, putting down 5% would only qualify for a $530K home…? does that seem right (someone please call me out if my logic is flawed)?

#120 Lobster Man on 03.19.19 at 8:47 pm

Garth,

<>

Is the RRSP amount included the $1.27 million investible assets?

If it is, the amounts after tax may vary between individuals.

If it isn’t, I am sure the number of such individuals will be a lot less than 298,000.

LM

Assets are assets. Just like unrealized capital gains. – Garth

#121 Semi Retired Conservative on 03.19.19 at 8:53 pm

Oh dear. The safe space snowflakes have put me in the linguistic doghouse. I do apologize for the kerfuffle Garth.

I should not have used the “R” word to refer to Cam (or mentally to the language fascists)

They are in my opinion imbeciles though.

Is imbecile still okay ?

Or is a week next Tuesday UN Imbecile Appreciation Day ?

mea culpa.

#122 Nonno Nicola on 03.19.19 at 8:58 pm

DELETED

#123 Exurban on 03.19.19 at 8:59 pm

#88 CEW9

Yes, that looks pretty much like direct government investment in real estate. I’m appalled but not shocked; others on this board predicted it.

I’ve never made $300k a year but I once paid income tax at a rate of 54.16%. The place was B.C. and the time was the mid-1990s when the NDP raised provincial income tax for everyone making over $65,000. I’d already been pretty much cured of leftism but that was an additional vaccination.

#124 crowdedelevatorfartz on 03.19.19 at 9:01 pm

@#65 Millenial Surrealist

“Thanks for nothing, Boomers.
Be part of the change.
Or be run over by it.’
+++++

every once in a while a skipping record makes me smile.

I wonder if the “change” in Venezuela was what the masses had intended when they voted for their ‘Socialist Revolucion”.
Viva Hugo Chavez!
Viva Maduro!
Until the starving sheeple realize they’ve been had… once again…. and put his oversized gourd on a pike outside the Presidential Palace.

Keep hoping Millenial.
Rich Boomers are counting it.

#125 Keynes was a Vicious Bastard on 03.19.19 at 9:05 pm

Keith Weiner has stepped up his game in attempting to shed light where most don’t want to even look. The trend towards socialism is rooted in Keynesian Economics it appears.
Have a read for yourselves:

“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.”

“My goal is to make you mad. Not at me (though I expect to ruffle a few feathers with this one). At the evil being wrought in the name of fighting inflation and maximizing employment. And at the aggressive indifference to this evil, exhibited by the capitalists, the gold bugs, and the otherwise-free-marketers.”

“In researching several recent articles, I re-read old passages from Keynes. Consider these snippets:

“For a little reflection will show what enormous social changes would result from a gradual disappearance of a rate of return on accumulated wealth.”

“In short, the aggregate return from durable goods in the course of their life would, as in the case of short-lived goods, just cover their labour-costs of production plus an allowance for risk and the costs of skill and supervision.

Now, though this state of affairs would be quite compatible with some measure of individualism, yet it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity value of capital.”

The rest here:

https://monetary-metals.com/keynes-was-a-vicious-bastard-report-17-mar/

TCC

#126 mathman on 03.19.19 at 9:05 pm

Cam’s numbers seem off, but his issue is right on the money. Being a 1% in income does not make you a baller at all in the GTA or YVR – I’m not talking about the $2.5 Million/year set, but the $250k club.

It seems like a lot of money – and 15 years ago I would have thought I had made it at 250k/yr. The reality is after taxes, household expenses, childcare there is not a lot left. I’m very luck to call this country home – but it is super expensive and we pay a premium for all the things that make this country great – and the reality is the top decile of tax payers get bent over for the majority to enjoy the benefits Canada has to offer.

What most don’t realize once you are in the top marginal bracket is that a raise of $25k gross is basically nothing net (on a bi-weekly basis)

not a compliant but a reality of who shoulders the burden.

Google the tax system explained by beer by Howard Marks – funny but true.

Math

#127 crowdedelevatorfartz on 03.19.19 at 9:06 pm

@#106 Over cooked Meatloaf
“Got better things to do with my time than respond to comments that will most likely never be read … ”

+++++
Hopefully I was the only one bored enough to read your comment…..

#128 PeterfromCalgary on 03.19.19 at 9:06 pm

Time to vote the SNC-Lavalin party out! Don’t let the door of Parliament hit you in the ass Justin!

#129 Tater on 03.19.19 at 9:08 pm

#10 Bob on 03.19.19 at 4:51 pm
Your numbers don’t add up. The effective tax rate on $300K in Ontario is 40.93%. If Cam’s quarterly gross is $91,803, then his net should be $54,288 for a yearly take home of over $200K (before deductions and not considering investment income).

Not my numbers. His. A big bonus in one quarter would certainly alter his net. – Garth
———-/———————————
Either his employer has screwed up the withholding amount or he is contributing to some sort of savings plan. Even if you apply the top rate and take out both cpp and Ei you still don’t get down to 38k.

#130 Sold Out on 03.19.19 at 9:09 pm

Garth,

Thanks for editing post #11. People who use that word as an insult reveal a stunning lack of insight, and probably kick dogs.

#131 Vampire Studies on 03.19.19 at 9:12 pm

Shawn/Penny – good evening

I believe these people have $480k total. At just over 4% that is $20k/yr. Approx 30% max could be in
TFSAs. They are also retired but have the tax credits
they mention. Not overly impressive for two accountants.

So if pension income (CPP + OAP) is $16k each, plus $10k interest, total each is $26k. Not sure how much the tax credits are but as accountants they will max that. From the $26k total income, if they each pay $1000 at a 25% rate, they are clearing $22k each before tax. Subtract $3k for TFSA interest and you are down to $19k each tax free. Can the credits add up to this?

Bottom line is they aren’t livin’ large.

#132 Yankee Canuck on 03.19.19 at 9:12 pm

Garth is right. Again.

I am basically also the same as Cam. Born lower middle class (or upper low class as a buddy says), went to school forever, had a mountain of debt, paid it off, started earning serious money later in life. Difference is I moved to the US.

I think about coming back often and the taxes are a real disincentive. Why put up with lousy weather and ridiculous taxes? How can the country stay competitive? I will probably never work again in Canada.

#133 yvr_lurker on 03.19.19 at 9:16 pm

The budget of the Gov’t to do the equity sharing plan is frankly ridiculous. Trudeau wasting $$$ on this and bloating the debt. However, am all for driving those foreigners out of our local markets who have been for years spiking the real estate prices in our major cities.

Going after real estate tax cheats, money launderers, and people hiding offshore income is a great idea. Beef up the CRA temporarily to seriously go after these people.

#134 Robert Ash on 03.19.19 at 9:17 pm

I read a link to a CBC article that a Previous Blogger linked, citing a survey that 57% of Canadians, want to tax the Rich more, and expect their Government to provide thier services. It was a little shocking to me, to read the comments, here. Two take aways for me… Clearly there is a kind of desperation, in the Air… I understand this, as there is little optimism…. The worst trend though, is the level of hopelessness, and underlying anger, but that is trumped by the lack of Ambition, and Determination, that all young folks, seemed to possess, not that many years ago.. A sense of Hopelessness, and abject surrender… to justify, taking anothers person’s effort toil and hard work, and just rationalizing confiscating the others success… How can people with any rational thought, consider this a viable option…Do folks not realise, that you can only do that once… What fool, will keep working, if they have to surrender the fruits of their labor… People are so delusional they have convinced themselves, that a Doctor for instance, has a fun, day, helping and making all that money… so share.. but forget the long hours, patient complaints, tragedy of life and death, staff, and overhead, and all then forget the 12 years of Educational scraffices, and student debt… There is an extreme atmosphere of denial here… and it is scary!

#135 Georgia USA on 03.19.19 at 9:27 pm

#131 Yankee Canuck – Yoo oil cum back now is the typical southern drawl. Give it another try!

#136 Ace Goodheart on 03.19.19 at 9:28 pm

Re: US versus Canada tax rate difference:

I had this same conversation with a group of full time staff the last time we were down in Disneyland.

We were talking about how much higher our taxes are in Canada.

The full time Disneylanders did not agree.

They pointed out that employees in the USA pay a “hidden tax” in the form of health insurance premiums. I was told this amounted to between $7000 US and $12000 US, per year, deducted directly from their pay cheques. This works out to around $10,000 to $17,000 CDN per year in “hidden tax”.

Include this health insurance premium, I was told, and workers in the USA pay as much, or more, in income tax than do their fellow workers in Canada (for whom the health insurance premiums are included as part of their income taxes).

They also pointed out to me that prescription drugs in the USA can cost thousands of times the price of their generic equivalents in Canadian pharmacies. One mentioned a cancer drug that a relative was taking, that could be purchased for 10 convertible pesos in Cuba. The same drug cost $10,000 US per dose in Florida (luckily covered by her relatives’ insurance plan).

Many Canadians travel to Cuba each year to get this cancer drug.

Americans cannot do business with Cuba and cannot purchase this drug there.

I left the conversation both better informed and also quite chastened. Turns out our Canadian system isn’t really that bad and we actually likely pay less tax than do Americans if you include health insurance.

Who knew?

#137 not 1st on 03.19.19 at 9:29 pm

Trudeau is a hilarious caricature of incompetence. Kneecapping the oil industry and then offering rural broadband for western Canada like that’s going to make us all happy instead.

#138 Ken from BC on 03.19.19 at 9:32 pm

#3 Paul

“I’m sorry…I started laughing at $300k a year and still whining. ”

Paul, I pay more in taxes in a year than you gross in a year and yet you laugh. Well laugh while you can monkey boy. When the tax rates drive myself and others like me from the country, you might end up having to pay you own way. Then we will hear others talking about how you are whining

#139 SmarterSquirrel on 03.19.19 at 9:33 pm

In 2012 the top marginal tax bracket if you lived in Ontario was 46.4%. Now it’s 53.53%. Yes if you keep earning more gross pay you earn more take home pay. But when you get less than what the government takes for every additional bit of work you do, the incentive to keep working more isn’t as strong. Particularly when the government takes that money from you and uses it to buy 10% of someone else’s house, especially when you yourself rent. There’s nothing wrong with renting and Canada already has high home ownership rates. So I see my tax dollars being wasted… I’m good with measures to provide clean drinking water, that’s money well spent.

The deficits and the growing debt and the growing interest payments likely means higher and higher taxes going forward…

#140 Bobby Bittman on 03.19.19 at 9:47 pm

#129 Sold Out

They use that word because it is powerful and triggers people. By drawing attention to it, the power of the word increases. It’s a fairly elementary concept that’s lost on the word police.

#141 MacroDave on 03.19.19 at 9:50 pm

Hello Garth,

A few recent blogs including today’s mentioned the 40% of (households/individuals-clarification?) that pay no effective income tax… This seems a profound claim. Where does this data come from? Is there any chance you will highlight a couple case studies in the future on how this is possible as a mainstream situation?

#142 Sydneysider on 03.19.19 at 9:52 pm

This guy needs to hire a decent tax accountant. We bank more than that on less than half the income.

#143 Boots on the ground in Portland on 03.19.19 at 10:10 pm

#131
Timely manner posting after you. Could say the same minus the making a bunch of money. Not sure we’ll ever be back in Canada. Maybe it’s just because I grew up in USA which is not a picnic I’m looking at through Rose color glasses, don’t get me wrong but in many ways I’d still rather us be trying hard in USA and really not making a ton of money, (relatively, as Garth points out) than move back to Canada and be looked at as “making more money than a lot of folks” and then dinged for it. Or worse not be able to find equivalent work and so be making less which means be in the 40% who pay no income taxes and are the entitled leeches.

Call it pride or just stupidity of American work ethic but I’ll take the work ethic. (I can also get on my soap box about work becoming too much of a religion all in the same breath, contradictory as that may sound at this point)

#144 meslippery on 03.19.19 at 10:11 pm

#58 electric cars do not pay gas or road tax for our sea to sea highways and now a rebate to own one .Oh boy the cost of gas to make up for lost revue (road tax) has to come from somewhere ,just imagine if only 10% of vehicles are electric the price of gas will parallel to rise of cigarettes taxes if lefties have their way.
———————–
If your ever need a thin edge of the wedge example
just look to the non- smoking campaign.
The girl at the desk next to you is breathing your second hand smoke, you must go outside then all will be OK.
Now smoking outdoors (Think in your own car in a hospital parking lot or a park) will kill everyone.

#145 Boots on the ground in Ptown on 03.19.19 at 10:13 pm

What I actually showed up to post was this, from our stateside real estate bubble watching blog:

Market leveling attempts done USA style. Ok it must be said the sue happy stuff is way old but hey this is a worthy attempt anyway. #disrupt

https://www.forbes.com/sites/alyyale/2019/03/19/lawsuit-alleges-collusion-inflated-commissions-among-realtors/#2d28c1192a44

#146 Vision on 03.19.19 at 10:13 pm

Regarding the 40% that don’t pay taxes…
I wonder how many of them are working for cash under the table?
Eg. Home renovators, handymen, cleaning ladies, hairdressers who work from home,people flipping houses, people renting out basements, condos for cash, the list goes on.
I wish the government would get smart about these types rather than taxing honest people more.

#147 saskatoon on 03.19.19 at 10:24 pm

#103 Reality is stark

charity is giving.

taxation is not charity; it is force.

it isn’t a question of benefits…it is a question of morality.

if it were a question of benefits…then it would be immoral for you to spend time/money to write comments on this blog.

think of all those who would benefit right now if you went outside and gave away your stuff.

#148 georgist on 03.19.19 at 10:27 pm

Surely now you must be able to see, that when you let all gains flow to land, everyone who has to work to pay for rent/mortage will always be handing over most of their gains to rentiers?

Work does not work when land prices adapt instantly upwards to productivity gains.

People who *already* own land reap the benefit. Those who come after get no gain.

Tax land. Do not tax labour.

Read Henry George. It will change your perspective.

#149 C. L. on 03.19.19 at 10:27 pm

Wow! It’s like this post spoke directly to me. I can’t help but comment and thank you for it. Every year that’s gone by, my net income was proportionately flat as my gross was increasing. Why was I working so so hard? At 44 I’ve pulled the plug. I’ve more than enough savings and now, freedom like I’ve only previously dreamed of. I would not have made the shift so early without the reality of 54%+ tax rates. At a certain point it’s not logical. Now, I engage in part time activities when interested and travel when bitten. With many years to foster success and support loved ones, in a way I am grateful for the nudge.

#150 NotLegalAdvice on 03.19.19 at 10:30 pm

#12 MF

“.

Anyways, taxes are a universal complaint. I paid thousands last year, and I make a fraction of what this guy makes (I also contributed to an RRSP this year for the firs time to mitigate income taxes spent”

You’re finally learning MF! My wife did this for the first time too. Instead of paying 1 grand to the government, they owe us 4k.

#151 yycnotretired on 03.19.19 at 10:33 pm

To everyone that is making fun of Cam “whining for making 300K” you missed the point.
Cam DOESN’T make 300K. The government took more than half of it already!

My fam is similar but not 1%. We get no child benefit, subsidies, or carbon rebates because we are “too rich”, and yet after rent, childcare and savings and yes, taxes we arn’t swimming in it at the end of the day.

#152 cd on 03.19.19 at 10:35 pm

just wondering if this is a thing?

https://www.thestar.com/news/gta/2019/03/19/danforth-condo-cancelled-by-developer.html

#153 Tony on 03.19.19 at 10:44 pm

DELETED

#154 DON on 03.19.19 at 10:45 pm

#41 SunShowers on 03.19.19 at 6:01 pm

Don’t get too excited. Income and pricing caps on this program, and the equity share is just 5% on resales. – Garth

——-

Yeah, I don’t see this budget doing anything to house prices or affordability at all. Positively or negatively.

It’s adorable that they bumped the amount people can raid from their RRSP to buy a house. If first time home buyers don’t have money for a down payment, they surely don’t have anything in an RRSP.
*************

Is it true that the actual program won’t be in place for months (fall)? Does it cost money (legal) to get the gov of the title?

Gotta wonder how many on this blog only read the headlines and not the details? The housing market needed immediate propping to combat against negative sales and sentiment.

This won’t end well!

#155 crossbordershopper on 03.19.19 at 10:45 pm

what people dont know much about the usa is not the marginal tax rate differential or write off mortgage interest or if in florida no state income tax.
the real thing is the access to capital, so you can borrow money and buy a business and make 300K sure no big deal and pay little tax and with lower taxes and better weather and growth opportunities.
you cant borrow a nickel in canada, unless its real estate, that is the big difference, everything else is minor, if your not able to make good money, nothing much else matters. go for it.

#156 William R Drury on 03.19.19 at 10:53 pm

Boy have you got that wrong. 1.27 million with no pension plan (excluding cpp and oas) does not make you a 1 % top group. With private sector workers with group rrsp plans I think you need a re-think. Government /school and Hydro workers are getting 70% or better their yearly wage. So you think you can generate a guaranteed return annually of 7% where’s the contract?

#157 NFN_NLN on 03.19.19 at 10:54 pm

#15 Bill on 03.19.19 at 5:10 pm
Something’s fishy here. How on earth does he pay 20K in tax on a 33K bonus? This is a 61% marginal tax rate.

Same thing happened to me. Bonus paid out in early 2019. They take out all the EI and CPP for the year and tax like you’re going to make that every pay period.

It means you get higher pay in later months since the EI and CPP are maxed out, and anything they take extra comes back after you file taxes.

Some people just like to complain.

#158 BC_Doc on 03.19.19 at 11:08 pm

“A typical statement now heard among doctors: ‘why not work part-time and make the same after-tax income?’ So, people have less health care available. Who wins?”

I’m a doc who has lived within his means for the past two decades, saved aggressively, and invested wiseley. My nest egg is now large enough to support me without having to go to work in the ER (nights, holidays, weekends, time away from family, stress++). I’m at the point where if I work more I’m going to hit a super high marginal tax rate for income that I can do without. Part of me thinks, why work if Trudeau is just going to tax half of it away. The system at this point needs me more than I need it. Trudeau is really pushing me to retire early. On a bigger scale, this is a real problem. If guys and gals like me retire en masse, who’s going to look after folks? This is all from bad tax policy.

#159 Out Of Work CEO, Will Travel on 03.19.19 at 11:10 pm

Hiking in the Catalina State Park in Arizona was busy today and all the parking lots were overflowing with baby boomers mostly and very few kids. Some Canadians from Alberta and B.C. hauling their big RV’s. My word the desert is in bloom and will break your heart the beauty is nonstop. America is a floral and birdwatching mecca down here in the Arizona desert. Of course, there is much mention about the border and in Arizona the Latin demographic is large and they have kids. You see large families having kids and they don’t get the government benefits available in Canada. The Latinos here seem indifferent to benefits and work satisfies their aspirations.

#160 Ronaldo on 03.19.19 at 11:15 pm

Here Garth.

https://directworkwear.com/shop/workwear/packable-tricot-zip-safety-vest/?attribute_pa_color=hi-viz-yellow&attribute_pa_size=m&gclid=EAIaIQobChMI3bHhhuCP4QIVHB-tBh2fLgC3EAQYBSABEgI0cPD_BwE

#161 Leo Trollstoy on 03.19.19 at 11:15 pm

As a fellow 1%er, Cam’s letter was ignorant

Keep it to yourself and vote appropriately or leave the country

Man what an idiot with no self awareness

#162 Smoking In The Hospital on 03.19.19 at 11:20 pm

There was a specialist in Ontario who smoked a pipe in the hospital within his office and down the hallways, and nobody would dare to complain. He was the greatest surgeon in the world, and those that had money from USA or elsewhere, wanted him to perform their surgery in order to live.

#163 Leo Trollstoy on 03.19.19 at 11:20 pm

Cam didn’t write that trash for any purpose but to show his off his e-peen and to compensate for his childhood insecurities

#164 Paul on 03.19.19 at 11:23 pm

#129 Sold Out on 03.19.19 at 9:09 pm
Garth,

Thanks for editing post #11. People who use that word as an insult reveal a stunning lack of insight, and probably kick dogs.
————————————————————————————————
Yes I couldn’t get to sleep knowing that word was on this blog sitting there mocking all that is good and just in society,l feel so much safer now. George Carlin would be happy, lol

#165 Remembrancer on 03.19.19 at 11:23 pm

#143 meslippery on 03.19.19 at 10:11 pm

Don’t think it’ll kill everyone, but you’re agreeing then that my tax $$ won’t be needed to care for your health problems related to smoking and you’ll look after your own butts, right? Thought so…

#166 Remembrancer on 03.19.19 at 11:26 pm

#141 Sydneysider on 03.19.19 at 9:52 pm
This guy needs to hire a decent tax accountant. We bank more than that on less than half the income
———-
More a spending problem then a tax problem…

#167 Figure it Out on 03.19.19 at 11:26 pm

“But every dollar of income that they tax is one less dollar I have to spend in our economy.”

It would be nice if you explained to him where his taxed dollars end up, instead of just ridiculing him by publishing his misconceptions.

#168 Ronaldo on 03.19.19 at 11:30 pm

When I purchased my first new home back in 69 (the olden days, I was 23), there was something called the Home Owner Grant for first time home buyers of new homes.

In my case, the grant was $1000 on a townhouse valued at 21,000 or roughly 5% of the value.

If you lived in the place for a minimum of 3 years you did not have to repay it. I could have bought the place without this grant as the price represented 2.5 times my annual income and the total payments 1/3 my net pay.

Since I only had $500 in the bank I borrowed the down payment from my mother ($3000) and repaid her within a month as once the deal was signed I went back to the bank and borrowed the $3000 which I told them was for furniture so no problem getting the loan.

I used the $500 I had in the bank to buy the fridge and stove so that left me with no savings but a $1000 grant expected later in the mail.

I was now a happy broke home owner. The same place today is valued at $795,000. 38 times what I paid for it.

How times have changed.

#169 js on 03.19.19 at 11:33 pm

Absolutely agree with #53 comment! Makes no sense to get married to CMHC! ;)

#170 Al on 03.19.19 at 11:41 pm

Our prescient host foresaw cheaper Tesla’s. Didn’t happen. The model Y will have to wait.

#171 Hy-Keys on 03.19.19 at 11:46 pm

1% here in income and net worth…I don’t feel privileged, I feel pissed. Thinking I should learn French so another Trudeau doesn’t become PM. What a joke, that guy!

#172 PastThePeak on 03.19.19 at 11:54 pm

Garth, for a financial blog, you sure seem to attract a lot of financially illiterate people.

#173 Stan Brooks on 03.19.19 at 11:55 pm

Poor sheeeple.

High taxes. Incentivised competition for housing resulting in sky high prices and ridiculous un-affordability in the name of ‘affordable housing’ (houses that cost millions for people who take home very little).

Drawn in debt, with roaring inflation, low quality government services, deteriorating health system, no savings or investments, rudimentary pension system, bunch of price fixing oligopolies who outsourced labour and charge ridiculous prices for substandard products and service ripping off consumers, non-transparent and shady real estate mafia, substandard construction, incentivised bidding wars all in the name of the consumer but for the profit of a few morally bankrupt enterprises.

Corrupted liberal government, bought for media, no prospects for the young.

Worse than a third world country, those actually grow while our (record) debt fueled ‘economy’ is sinking fast with not even nominal growth despite the inflation and we have not started even deleveraging.

Yellow west?

That was telling.

My warning always has been that ordinary people will pay up the bill at the end while the mafia and corrupted politicians profit from their pain. Run as far as you can and move out any assets as faster as you can out of the reach of the thieves.

They will make life so expensive as to force you to sell off your assets just to survive a meager but ultra expensive low quality life, you won’t be able to retire and will pass nothing to your hairs,if you are lucky to have any due to the high cost of living called ‘standard’.

Socialist high taxes in a service-free virtual consumption and debt fueled ‘economy’ that provides very little essential services at extremely high costs.

Noncompetitive economy with sinking currency, roaring inflation and incompetent central bankers who spew stupidity after stupidity and are unable to perform basic math (calculating their ‘inflation’ which is an absolute fraud and insult to any form of intelligence).

What a pathetic place has this become.

Combine that with a bunch of losers who brag about their ‘wealth’ comprised from sub-standard units (glass condos, cornflake homes) in the middle of a frozen tundra and idiotic taxes like the carbon one, led by man child spoiled trust fun leader who never worked a meaningful job in his life surrounded by morally corrupted or incompetent bureaucrats who serve the uber rich elite.

#174 Al on 03.19.19 at 11:56 pm

“Already 40% of families pay no net tax”. That should not keep being repeated. That percentage is highly misleading to say the least, arrived at when you start subtracting social benefits (CCB) from the actual income tax one pays. We can juice that 40% even higher if we start adding even more social benefits.

#175 Drunken Stupor on 03.20.19 at 12:06 am

One more brilliant gem:The Tax System Explained in Beer
Suppose that every day, ten men go out for beer, and the bill for all ten comes to $100. If they paid their
bill the way we pay our taxes (by taxpayer decile), it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that’s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the
owner threw them a curve ball. “Since you’re all such good customers,” he said, “I’m going to reduce the
cost of your daily beer by $20.” Drinks for the ten men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected.
They would still drink for free. But what about the other six? How could they divide up the $20 windfall
so that everyone would get his fair share?
The bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer
he was, to follow the principle of the tax system they had been using, and he proceeded to suggest the
new lower amounts each should now pay.
And so the fifth man, like the first four, now paid nothing (a 100% saving).
The sixth now paid $2 instead of $3 (a 33% saving).
The seventh now paid $5 instead of $7 (a 29% saving).
The eighth now paid $9 instead of $12 (a 25% saving).
The ninth now paid $14 instead of $18 (a 22% saving).
The tenth now paid $50 instead of $59 (a 15% saving).
The first four continued to drink for free, and the latter six were all better off than before. But, once
outside the bar, the men began to compare their savings.
“I only got a dollar out of the $20 saving,” declared the fifth man. He pointed to the tenth man, “But he
got $9!”
“Yeah, that’s right,” exclaimed the sixth man. “I only saved a dollar, too. It’s unfair that he saved nine
times more than me!”
“That’s true!” shouted the seventh man. “Why should he get $9 back, when I got only $2? The wealthy
get all the breaks!”
“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next day, the tenth man didn’t show up, so the other nine sat down and had their beers without him.
But when it came time to pay the bill, they discovered something important: They didn’t have enough
money between all of them for even half of the bill!
And that is how our tax system works. The people who already pay the highest taxes will naturally get
the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they
just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is
friendlier.

#176 Russ on 03.20.19 at 12:18 am

Penny Henny on 03.19.19 at 6:53 pm

I have 1.18mm plus 420,000 house. Not top group.

I sell house, spend $300,000 on hookers and am left with no house but $1.3mm invest-able.

Now I am top group (and happy)
—————————————————–

Hey Penny,

I think you just answered your own dilemma.

Cheers, R

#177 Barb on 03.20.19 at 12:21 am

#35 Kebo Slice on 03.19.19 at 5:54 pm
“I think what this post speaks to is that maybe it makes more sense to tax wealth than it does to tax income.”

———————————————-

Oh gawd, here we go.
And don’t forget inheritances.

#178 S on 03.20.19 at 12:21 am

#17 MF on 03.19.19 at 5:13 pm
“-Medical school is a privilege that thousands of students don’t get a chance to “pay dearly for”, even though they would give everything for the opportunity. This is because admittance rates are kept artificially low.”

Admission to med school is not a privilege; it is a result of many years of grueling work while not knowing if the effort will produce desired results. Kids applying today are expected to not only have top notch grades, they are also need to have excelled at a sport, preferably on a varsity team while obtaining their first degree, play an instrument or two and have logged countless hours of community service. An applicant must also present himself/herself with great bedside manner.
So no, just wanting to be a doc is not good enough. It takes a particular type of an individual. Most don’t have the grit. The quota system is designed to ferret out those who do.

#179 Russ on 03.20.19 at 12:29 am

Bobby Bittman on 03.19.19 at 9:47 pm

#129 Sold Out

They use that word because it is powerful and triggers people. By drawing attention to it, the power of the word increases. It’s a fairly elementary concept that’s lost on the word police.
————————–

You got it Bobby.

Another point lost on people is they should just ignore it when used as a noun.

But ret…d is perfectly acceptable as a verb as it may be used to describe an honest action.

In describing people I prefer the acceptable slang, fucktard.

Cheers, Russ

#180 AlMac on 03.20.19 at 12:30 am

Garth
What is your solution? Higher taxes for lower income earners? Lower or no OAS? US health care- like plans? Less funding for aboriginal issues?

I am one of those dreaded 1%ers; but I want more for my fellow citizens than money just for myself. If this means higher taxes, so be it.

#181 Becks on 03.20.19 at 12:33 am

As I type, I am looking at my T4.

Line 14, Employment income: over $375k.
Line 22, Income tax deducted: about $147k.

Including EI and CPP, let’s round my tax obligations to $150k.

I am completely fine with this level of taxation. Some people make 10% or less of what I make with 200% or more of the effort. I was born with a high IQ and a predilection for sitting in front of a computer screen for hours on end. That makes me lucky, not deserving.

However, I wish the government would spend our tax dollars in a less pandering manner. I have no interest in subsidizing Canadians to go deeper into debt to buy houses.

#182 Nonplused on 03.20.19 at 12:40 am

#145 Vision

Who pays cash anymore? I think the size of the black market is a lot smaller than it used to be. Even the guy who fixes my hot tub has a little card reader that plugs into his headphone jack on his cell phone and thus takes visa.

And paying cash for major expenses is a royal pain. Under the guise of anti-laundering rules mostly to do with drugs it is really hard to move large amounts of cash in and out of the banking system anymore. Just try it sometime: Go down to you bank branch and try withdrawing $10,000 sometime. They probably don’t even have the cash on hand. I tried doing that some years back to buy a motorcycle privately and had to settle for $3,000 and a money order.

Or another time, during the great crash of 2008, I decided it would be a good idea to move $100,000 from one bank account to another each at different banks for CDIC coverage purposes. Holy heck did that turn out to be difficult! And this is money that was already in the banking system!

I am sure there is still a black market that is alive and well in Canada, but outside of drugs and prostitution I doubt it’s very big. Even a simple car repair can easily cost over $1000 these days and nobody carries that kind of cash. It would be very risky to operate a business under the table to a very large scale in today’s world. You can’t even deposit anything over $10,000 cash without the RCMP getting a report from the bank, if the bank will even take it. They literally do not want to take it.

#183 Hello on 03.20.19 at 12:48 am

DELETED

#184 Mr White on 03.20.19 at 1:16 am

Reading the comments, your readers are jealous priggs for the most part. I’ve worked as an entrepreneur and inventor for 45 years. I have made and lost loads of money over those years. Fortunately I set up bullet proof investments for the past 25 years, and will be able to retire when I choose.

Last year I did a project that caused me to make several hundred grand. This was nice, but it was all hourly work. So it was loads of hours spent, just at nice hourly rate that most would dream of.

I can attest, that when my taxes exceeded my take home, I felt it was getting to be a waste of effort. My partner felt the same way.

We revolutionized an important pipeline leak technology. It could make water crossings by pipelines essentially leak proof.

We came close to walking away because our time was far too high to sustain and the financial rewards too thin to continue. Mere pride and desire to finish that which was started kept me going.

If I was in the US the situation and the rewards would be significantly different.

I am not alone.

Canada has never been all that innovative compared to the US. I have worked in both places.

The attitude of our current government and that of many of the replies herein demonstrates that Canada is going in a direction that seems to reject reason, science, and fundamental economic theory in the service of entirely spurious and childish ideas that humans know how control our society and the natural functions of the planet Earth itself.

#185 Smoking Man on 03.20.19 at 1:28 am

DELETED

#186 Overheardyou on 03.20.19 at 2:06 am

Call me stupid but I’m still working hard to become a 1%er.

#187 Frank on 03.20.19 at 2:10 am

A few recent blogs including today’s mentioned the 40% of (households/individuals-clarification?) that pay no effective income tax… This seems a profound claim. Where does this data come from? Is there any chance you will highlight a couple case studies in the future on how this is possible as a mainstream situation?

No because if you dig into it you realize a significant portion of them are households you wouldn’t expect to pay much in the way of tax: lower or middle class retirees who aren’t working, own their homes outright and have minimal pension/savings income used to live.

You won’t hear that because the image Garth wants to project is households of young, healthy people full of kids who are lazy and suckling off the hard work of the disenfranchised wealthy.

#188 Kelvin on 03.20.19 at 4:34 am

So Garth, if taxes and government spending aren’t the answer, how do you propose to deal with the growing wealth gap?

#189 bigbruddaz on 03.20.19 at 4:46 am

Coming soon CRA microchips which will auto track your every movement and auto-deduct taxes from your electronically auto-recorded revenues. Unfortunately you will also have to rent the microchip and pay for its annual maintenance (including GST)…….

https://www.thestar.com/news/canada/2019/03/19/canada-set-to-begin-collecting-data-on-travellers-leaving-country.html

Going to the toilet will remain free for now…….

#190 The Flying Foxtrot on 03.20.19 at 4:57 am

Great Post Garth! Budget day is my favourite time of the year! (Time for a new hobby maybe???? haha)

#191 Dolce Vita on 03.20.19 at 5:07 am

The Banks of Ma & Pa of the Land rejoice (and their HELOC’s)!

The Bank of CMHC will now substitute for you and partner with your Junior(s) for that 1st home downpayment (presumably, Junior qualifies as a recently disaffected 2015 Millennial Liberal voter).

If your Junior(s) is/are destitute enough, the Bank of CMHC will do a “2 FER 1” or in discounted Biblical terms a “4 LOAVES, 2 FISH” miracle:

Junior = $20,000 down
The new Bank of Ma & Pa (a.k.a., CMHC) = $40,000 down

WHAT a country!

————————————————–

PS:

DEAR BILL Morneau: It won’t work and if so, only marginally.

RateSpy says it best:

https://twitter.com/RateSpy/status/1108194126376374272

#192 Dolce Vita on 03.20.19 at 5:26 am

Well Garth, your sure do know how to rile up your rabble with that 1%’er sob story.

From reading most of the Comments this AM about the above sob story I conclude:

1. That everyone’s an Ontario Tax Accountant – didn’t know that, that many Beancounter’s read your Blog until today.

2. Good job at pissing off the 99%’ers.

3. In the MISERY LOVES COMPANY Department, other 1%’ers came out of the woodwork to commiserate (as in giving, caring, sharing about their upwardly mobile close personal mythic friends).

WHAT a country and WHAT a Blog!

Buona Mattina d'[*]Italia Garth.

*Recessione tecnica

#193 BillyBob on 03.20.19 at 6:07 am

#17 MF on 03.19.19 at 5:13 pm
#9 expat on 03.19.19 at 4:50 pm

“They work on average 80 hour weeks providing a valuable service which they paid dearly for in terms effort and cost and brainpower to be good at.”

-Medical school is a privilege that thousands of students don’t get a chance to “pay dearly for”, even though they would give everything for the opportunity. This is because admittance rates are kept artificially low.

Moreover, time in school hasn’t meant anything since 1986. Everyone and their brother has years spent in school now, and the debt to go along with it.

MF

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

This makes no sense at all. Are you really simple enough to believe doctors don’t work hard, provide a valuable service, or have an expensive education?

As the motivational poster says, “Not everyone gets to be an astronaut”.

And as to time in med school being wasted, what are you talking about? A medical degree virtually guarantees you a job once completed. If one is smart, they take their taxpayer-subsidized Canadian education and head to the US to earn actual money.

I do agree with you on the pathetic ROI of a liberal arts education in any practical employment sense.

But, nice to see you’re still consistent with the passive-aggressive jealous Canadian meme (“He’s making 300k/year..looks like he’s doing okay in spite of said taxes.”)

I think it’s safe to say you’ll never have to worry about such things as paying too much tax lol.

#194 Dolce Vita on 03.20.19 at 6:12 am

More money for displaced workers to retrain from the budget:

Canada Training Benefit
$1,000
4 weeks off over 4 years

Yup, just enough money for 2 courses at your local College or University ought to do the trick and of “course”, take your time doing it whilst you are unemployed (and we’ve got that covered to on EI).

——————————————-

$8.1 Billion for the Indigenous (incl. $4.853 billion to settle land claims a.k.a. “settling historic wrongs”, $3.25 billion to eliminate boil water advisories and improve child healthcare & over 6 years $1.331 billion in loan forgiveness largely Legal Fees for Settlement Negotiations…see the $4.853 billion above).

THAT was CBC THE NATIONAL Math where 4.853+3.25+1.331 = 8.1 (on Planet Claire, but on Planet Earth = 9.434).

My Take: If you can’t Reconcile, Buy Compliance. And I’m not the only that thinks this…and I quote from Math challenged CBC The National’s quick interview of the National Chief of the Assembly of First Nations:

“More work needs to be done BUT I see the movement in the right way it’s just ‘gotta maintain momentum now.”

What a country!

Buona Mattina d'[*]Italia Garth.

*Recessione tecnica

#195 earthboundmisfit on 03.20.19 at 6:14 am

DELETED

#196 Howard on 03.20.19 at 6:37 am

So….Cam.

Who did you vote for in the 2015 federal election?

Highly relevant question.

#197 Dolce Vita on 03.20.19 at 6:49 am

I know, I know Garth…too many posts by me.

But this one is my personal favorite of them all and WORTH a quick glance at a YouTube video by CBC The National.

Background:

When the PM’s fangirl, Rosie Barton of CBC, asks Don Iveson Edmonton’s Mayor about what he thinks of how the Budget redistributes $2.2 billion of GAS TAX money [1 time] DIRECTLY TO THE MUNICIPALITIES bypassing the Provinces incl. evil Doug Ford (you need to only look at the 1st few seconds of the video link below to figure out what he thinks):

https://youtu.be/4_sFN-MllYg?t=2674

This budget is aimed at everyone else to vote for the Libs since they believe they have lost a good chunk of their 2015 Millennial vote. Throw 100 budget measures against the wall and see what sticks by October 2019 and campaign on that.

And all the Opposition could do was shout down Morneau during his budget speech about a JWR rematch.

Vacuous to say the least by them.

Ferret in the chicken coop Liberals gets away with no viable critique from the Con’s, NDP, Green’s save the NDP (all they could say was that they were pissed off that the Libs, yet again, are stealing all of their ideas and getting elected for it).

That’s it for me Garth. Thanks for your patience and from my fellow Commenter’s as well.

#198 MF on 03.20.19 at 6:51 am

#178 AlMac on 03.20.19 at 12:30 am

“I am one of those dreaded 1%ers; but I want more for my fellow citizens than money just for myself. If this means higher taxes, so be it.”

-Best reply in this entire comment section.

I would venture to say Americans, in general, are more self centered than Canadians. It provides for some vibrant capitalism like we have today, but also some huge painful downturns like in 2008.

MF

#199 Captain Uppa on 03.20.19 at 6:51 am

How about we try and strive for becoming happy. Just happy. Content. How much is enough?

Studies have shown that money does not add any more happiness or contentment to your life over a certain amount (income of 60-70K US). It can be much less in certain countries.

So stop chasing 1%’ership, and start chasing fulfillment. And before people get all uppity, being in the 1% doesn’t automatically make you a miserable jerk either.

#200 MF on 03.20.19 at 7:08 am

#142 Boots on the ground in Portland on 03.19.19 at 10:10 pm

“American work ethic”

-Lol what a joke. I work 60 hours a week. Is that “Canadian work ethic” ?

Go on another forum with a lot of Americans and listen to them complain about “rich people”, taxes, this kind of person that kind of person and so on to see what “American work ethic” looks like.

#131 Yankee Canuck on 03.19.19 at 9:12 pm

There are 22 trillion reasons why taxes won’t stay low forever in the US.

MF

#201 peter on 03.20.19 at 7:10 am

I’d like to know how many of these people making 300k+ and whining about taxes ever think about how they’ve used the government to make that much.

Would you be there without your government funded education? Would you be there without your government funded health care? Would you be there without your government funded infrastructure? Or are you just a selfish leech, only interested in sucking from the system for life, then complaining when you benefit from it so much?

#202 Gordon on 03.20.19 at 7:38 am

Another Trudeau sychophant jumps the Liberal Titanic. Just finished watching Al Jazeera and RT, they’re calling Justinian some not so flattering names. The CBC hyped myth of his popularity swirling down the crapper. I predict many many more. I honestly believe Trudeau will have to tried for treason and that he will escape Canada before justice is served.

https://www.spencerfernando.com/2019/03/18/liberal-mp-don-rusnak-says-he-wont-be-running-in-upcoming-election/

#203 crowdedelevatorfartz on 03.20.19 at 7:52 am

The last day of Winter saw high temp records all over BC falling like teeth in a hillbillie brawl.

The first day of Spring has us watching the dithering debacle also known as Brexit lurch towards disaster.

Mean while in China, pigs are falling to an African Flu with a 90 % mortality rate….only the local govt officials refuse to acknowledge there even IS a flu…..
What could possibly go wrong?

https://www.reuters.com/article/us-china-swinefever-reporting-insight/piles-of-pigs-swine-fever-outbreaks-go-unreported-in-rural-china-idUSKCN1R10VQ

Invest in Pork Futures.
1.3 billion hungry Chinese demand it.

#204 Tater on 03.20.19 at 7:57 am

#125 mathman on 03.19.19 at 9:05 pm
Cam’s numbers seem off, but his issue is right on the money. Being a 1% in income does not make you a baller at all in the GTA or YVR – I’m not talking about the $2.5 Million/year set, but the $250k club.

It seems like a lot of money – and 15 years ago I would have thought I had made it at 250k/yr. The reality is after taxes, household expenses, childcare there is not a lot left. I’m very luck to call this country home – but it is super expensive and we pay a premium for all the things that make this country great – and the reality is the top decile of tax payers get bent over for the majority to enjoy the benefits Canada has to offer.

What most don’t realize once you are in the top marginal bracket is that a raise of $25k gross is basically nothing net (on a bi-weekly basis)

not a compliant but a reality of who shoulders the burden.

Google the tax system explained by beer by Howard Marks – funny but true.

Math
—————————————————————-
A 25k raise in the top tier works out to $450 bi-weekly. That’s not nothing, that’s close to the average person’s car payment.

#205 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 03.20.19 at 8:04 am

Make Believes DESTROYED by Nashville, 3-0.

Totally pathetic franchise in a deplorable city has lost 4 of 5 games now.

Hey Bill Morneau, why not add to the budget some mental health counselling tax credits for Toronturds with an IQ over 75 who want to disavow their addiction to this loser team?

Bwahaahaahaaahaaaaaaa!

#206 Tater on 03.20.19 at 8:06 am

#199 peter on 03.20.19 at 7:10 am
I’d like to know how many of these people making 300k+ and whining about taxes ever think about how they’ve used the government to make that much.

Would you be there without your government funded education? Would you be there without your government funded health care? Would you be there without your government funded infrastructure? Or are you just a selfish leech, only interested in sucking from the system for life, then complaining when you benefit from it so much?
—————————————————————-
And what of all the people in the 40% who basically pay no tax? Do they not get the same benefits from healthcare, the same educational opportunities? Why should they pay nothing?

A fair tax system would have all Canadians contributing something.

#207 crowdedelevatorfartz on 03.20.19 at 8:12 am

and just when you thought the MSM couldnt be more irrelevant …..

https://www.apnews.com/e543db5476c749038435279edf2fd60f

#208 jess on 03.20.19 at 8:14 am

“You can’t even deposit anything over $10,000 cash without the RCMP getting a report from the bank, if the bank will even take it. They literally do not want to take it.”
=============
self reporting?
Wonder why? How many financial institutions filed currency transaction reports with incomplete and inaccurate information, which impeded law enforcement’s ability to identify and track potentially unlawful behavior? For example:

Berman’s office estimated that if U.S. Bancorp had had proper monitoring in place for just six months, it would have filed an additional 2,121 suspicious activity reports, known as SARs.
https://www.americanbanker.com/news/regulators-fine-us-bank-more-than-600m-for-aml-errors
https://www.thestar.com/news/world/2017/02/27/manulife-admits-it-was-bank-fined-12-million-by-canadas-money-laundering-watchdog.html

https://www.cbc.ca/news/politics/fintrac-money-laundering-fines-penalties-court-federal-appeal-manulife-bank-1.4510370

#209 New CMHC Data on 03.20.19 at 8:15 am

All,
My apologies if this was already posted.
Maybe this was missedon budget day.
CMHC released new data about non-resident owners.
In 2015, their figure was 3.5% in Van and 3.3% in Toronto.
Now, using all housing types, CMHC figures it is 11.2% in Van and 7.6% in Toronto across all housing types.
Low-interest rates and speculation may still be mostly responsible for the rise in prices, but these are significant numbers.

https://www.theglobeandmail.com/real-estate/vancouver/article-previous-housing-data-understated-amount-of-non-resident-buyers-in/

#210 Remembrancer on 03.20.19 at 8:18 am

#200 Gordon on 03.20.19 at 7:38 am

You’re watching RT and calling out the CBC? Haven’t you got an eastern European election to disrupt or something?

#211 maxx on 03.20.19 at 8:25 am

“And a major attempt to change the channel from the Lavalin mess.”

Every time the current crop of Liberals attempt to do this, they accomplish precisely the opposite.

I pray that Canadians never, EVER, let this outrageous mess slide, no matter how much interference the Libs try to run – JWR needs to speak again with zero gag order, all of those involved grilled under oath (some of whom were not at the inquiry) and this matter investigated fully and completely unfettered, so that the entire truth comes out.

One set of rules for the electorate and another for those at the helm and their cronies, eh??!

Canadians, overwhelmingly, think not. Liberals have underscored with deafening clarity the gap, nay, chasm, between their 2015 electoral platform promises and what truly lies beneath that veneer. Over and over and over again. The widely, loudly and repetitively proclaimed feminism, equality for all and transparency only works if you toe the line and keep your trap shut. Along with all of the other kow towing, good little bobble heads.

#212 TurnerNation on 03.20.19 at 8:45 am

#166 Ronaldo – “I used the $500 I had in the bank to buy the fridge and stove so that left me with no savings”

That was 1969 – $250 for each? The lowest-end new ranges, fridges can be had for $550 each today. Not bad.

Kijiji or CRaiglist would have nearly new for a fraction too

#213 IHCTD9 on 03.20.19 at 8:45 am

#197 Captain Uppa on 03.20.19 at 6:51 am

Studies have shown that money does not add any more happiness or contentment to your life over a certain amount (income of 60-70K US). It can be much less in certain countries.
____

I read that one and it’s true for me. I like the security of having a stash more than spending it. I have a few toys, but they all have a practical facet – years after they were bought this is the main reason I still own them.

Happiness through possessions is a temporary thing, and unless you want to live like a crackhead always running after your next fix, you’d best find out where real contentment comes from.

#214 Alistair McLaughlin on 03.20.19 at 8:56 am

So no 30 year mortgages, just some silly program that lets you reduce your mortgage if you are willing to give CMHC an equivalent ownership stake in your house, if you even qualify. Capped at $1.25 billion over 3 years, and not even implemented until the fall at the earliest.

They are allowing an additional $10K to be taken from RRSPs for the HBP, which I’m fine with. Letting people use more of their own money for housing is not going to inflate the markets.

Anyone crowing about how this budget is going to revive the housing market better think again. It’s over everywhere except Ottawa (where bidding wars are the norm right now, and with all this government spending, that will likely continue for some time yet.) But everywhere else, this little boutique program that might not even see the light of day will amount to nothing. So no, it’s not uppa uppa uppa. It’s over over over.

#215 Jack on 03.20.19 at 9:12 am

Ran some numbers the other day … I make 145k and my wife makes 75k. We’re thinking about starting a family and I wanted to find out how much more i’d need to make so that we’d end up with the same amount of family income if she stayed home. Turns out it would be 265k!!! So, i need to make another 120k to clear the same amount as she does on 75k. How is that fair? Income splitting should be a priority for a government that’s supposedly worried about families.

#216 IHCTD9 on 03.20.19 at 9:12 am

#199 peter on 03.20.19 at 7:10 am
I’d like to know how many of these people making 300k+ and whining about taxes ever think about how they’ve used the government to make that much.
____

“Would you be there without your government funded education?”

Yep, I would. 95% of my education was in institutions not funded by Government – as in 0%.

“Would you be there without your government funded health care?”

Sure as hell would be.

C’mon Man, folks have been getting rich and prospering since the beginning of time, 99.9999999999% which was done without government funded health care.

“Would you be there without your government funded infrastructure?”

This is one legitimate expense for government, but I get the feeling that they’re not in the infrastructure business anymore. At least out my way they’re not. Unless you include dumping 10’s of Millions on new Police Stations, new Fire Stations, new Town Halls, new Libraries, new Public Works facility etc… (all of which I can do without).

FWIW, I don’t make anywhere near 300K

#217 dharma bum on 03.20.19 at 9:17 am

#42 TS

What I don’t get is why keep working then? Wanna stick it to the man on taxes? You can make approximately 50k in Canadian dividend income without paying a cent of tax. Sell your big GTA house, rent, diversified dividend portfolio between you and your wife and voila, 100k of tax free income and no work. You don’t even have to touch the principal and your heirs can do the same thing in perpetuity. Don’t feel sorry for the 1% paying too much tax. They are choosing to pay.
——————————————————————-

Now you’re giving away my secret!

That’s the Dharma Bum life!

#218 IHCTD9 on 03.20.19 at 9:20 am

#212 Alistair McLaughlin on 03.20.19 at 8:56 am

So no 30 year mortgages, just some silly program that lets you reduce your mortgage if you are willing to give CMHC an equivalent ownership stake in your house, if you even qualify. Capped at $1.25 billion over 3 years, and not even implemented until the fall at the earliest.
___

I agree, 100% political budget with no meat and potatoes. Those measures are just to provide something to talk about, and only a moron would think home ownership is any easier now after this budget.

I’m glad they resisted the 30 year thing – makes me wonder why? The Libs have not shown any fear of burning money and generally frigging up the economy thus far – why the sudden restraint?

#219 Captain Uppa on 03.20.19 at 9:26 am

#212 Alistair McLaughlin on 03.20.19 at 8:56 am

>> So no, it’s not uppa uppa uppa. It’s over over over>>

My brother, Captain Over, is mainly focused on cashier jobs and the sedan automobiles at the moment.

#220 dharma bum on 03.20.19 at 9:27 am

#148 C.L.

Why was I working so so hard? At 44 I’ve pulled the plug. I’ve more than enough savings and now, freedom like I’ve only previously dreamed of.
——————————————————————–

Ahhh…music to my ears.

You are NOT alone!

Those of us that figure it out get to experience freedom.

Nothing quite as liberating as leaving the rat race behind.

#221 not 1st on 03.20.19 at 9:43 am

Garth, what happens to your house if CMHC is co-owner? Do they automatically drop off when you get a certain amount of it repaid. Will they stress test your before they let that happen? Who owns the house in a default? I would never in a million yrs let the govt be a co-owner of anything.

#222 Mattl on 03.20.19 at 9:44 am

#199 peter on 03.20.19 at 7:10 am
I’d like to know how many of these people making 300k+ and whining about taxes ever think about how they’ve used the government to make that much.

Would you be there without your government funded education? Would you be there without your government funded health care? Would you be there without your government funded infrastructure? Or are you just a selfish leech, only interested in sucking from the system for life, then complaining when you benefit from it so much?
————————————————————

Most high income salaried employee’s would be far better off without the things you mention. In my case, I would be far better off with my US company sponsored health plan and lower taxes. University may be subsidized but I had to take out pretty substantial loans to get through, I don’t remember it being a free ride.

High income earners use Gov’t services at a much lower percentage to tax paid. Not sure how someone that pays 100K tax per annum and goes to the clinic a few times a year for a prescription is a leech.

Nice rant but you are confusing high salary earners like Cam with business owners, who definitely benefit from things like free health care. A realtor can make 500K in a PREC, keep most of that in the business at 12% corp tax rate. Which is why I plan to incorporate ASAP.

High salary employee’s are anything but leeches, they pay their own way and 10 other guys way. A simple thank you will suffice.

#223 My Big Sister Told Me on 03.20.19 at 9:52 am

I am not part of the 1%, but getting there. Let me just say this… any high income earner who feels penny pinched like this guy has no idea where the money they do have is going.

I suggest you sit down and look at your personal budget… and just how much of your discretionary spending you are spending on your kids and your personal perks. It will blow your mind.

Then start taking time to volunteer in your community (and no, going to fundraising diners doesn’t count). Your child’s situation vs the rest of the world’s should cause you to pause and rethink your position. And don’t forget to bring your children with you. You’ve just lost touch with reality… claim it back.

#224 IHCTD9 on 03.20.19 at 9:54 am

#186 Kelvin on 03.20.19 at 4:34 am

So Garth, if taxes and government spending aren’t the answer, how do you propose to deal with the growing wealth gap?
____

Why does anyone need to do anything about a growing wealth gap?

#225 PastThePeak on 03.20.19 at 9:56 am

#199 peter on 03.20.19 at 7:10 am
I’d like to know how many of these people making 300k+ and whining about taxes ever think about how they’ve used the government to make that much.

Would you be there without your government funded education? Would you be there without your government funded health care? Would you be there without your government funded infrastructure? Or are you just a selfish leech, only interested in sucking from the system for life, then complaining when you benefit from it so much?
++++++++++++++++++++++++++++++++++++

I take it you didn’t think this one through first.

Everyone is getting the “govt benefits” you mention, you moron. It is just that the top 20% are paying for 65% of it (on an income tax basis).

You should ask for a rebate on your gov’t funded education, as you clearly are not making use of it.

#226 IHCTD9 on 03.20.19 at 10:07 am

#185 Frank on 03.20.19 at 2:10 am
A few recent blogs including today’s mentioned the 40% of (households/individuals-clarification?) that pay no effective income tax… This seems a profound claim. Where does this data come from? Is there any chance you will highlight a couple case studies in the future on how this is possible as a mainstream situation?

No because if you dig into it you realize a significant portion of them are households you wouldn’t expect to pay much in the way of tax: lower or middle class retirees who aren’t working, own their homes outright and have minimal pension/savings income used to live.

You won’t hear that because the image Garth wants to project is households of young, healthy people full of kids who are lazy and suckling off the hard work of the disenfranchised wealthy.
____

This has been covered multiple times. the Libs new CCB pays out big 4 figure sums per month to low income families.

Canada has many of these households, and an existing tax system that favours the poor (they pay less).

The lower the income, the lower the taxes; but the higher the CCB.

The end result is that approximately 40% of all Canadians have their entire income tax bill returned to them in the form of the CCB benefit.

6 figure income 4 person families are still getting a nice chunk from Trudeau (thanks buddy!).

I spend mine on fancy overpriced cheese bread and expensive craft beers.

#227 n1tro on 03.20.19 at 10:27 am

#176 S on 03.20.19 at 12:21 am
#17 MF on 03.19.19 at 5:13 pm

Admission to med school is not a privilege; it is a result of many years of grueling work while not knowing if the effort will produce desired results. Kids applying today are expected to not only have top notch grades, they are also need to have excelled at a sport, preferably on a varsity team while obtaining their first degree, play an instrument or two and have logged countless hours of community service. An applicant must also present himself/herself with great bedside manner.
So no, just wanting to be a doc is not good enough. It takes a particular type of an individual. Most don’t have the grit. The quota system is designed to ferret out those who do.
———————————
What a load of shit. So to be a good doctor, you need to play an instrument and have rowed on the varsity rowing team?! The fact that more students are qualifying while seats in medical school (and the # of medical schools) stay consistent is what the quota is about.

I respect the crap out of doctors and what they provide to society but lay off the crap that they are some sort of super human.

#228 Howard on 03.20.19 at 10:33 am

Garth, could you ruminate a bit tonight on how shocking this is that the government is now financially speculating in the housing market? If a property 10% owned by the CMHC appreciates, the CMHC apparently gets 10% of the appreciation (not just a repayment of the original loan).

#229 Figure it Out on 03.20.19 at 10:44 am

“And a major attempt to change the channel from the Lavalin mess.”

What the actual F?

The government releases a budget every year around this time. I think government would grind to a halt without one. Are they supposed to say “because we’re currently mired in scandal, we’ll be releasing the budget three months late to give Scheer & Co. a chance to continue acting like children regarding SNC, rather than giving them the opportunity to act like children regarding the budget”?

“Conservative parliamentarians banged tables and stomped their feet in the House of Commons on Tuesday while Finance Minister Bill Morneau sought to deliver a speech about the 2019 budget. The Tories eventually walked out, with Leader Andrew Scheer saying the budget had no legitimacy […]”

For shame.

#230 Sold Out on 03.20.19 at 10:48 am

Geez Louise, Garth

You could at least thank me for taking heat over your edit of post #11. Talk about triggered. The anti-PC beta crowd here doesn’t have the cojones to go after our gracious host, who actually removed the distasteful reference, but with the courage of anonymity opted to squeak up when I applauded it. If these rugged individuals have the courage of their convictions, they should have no qualms about going out in the real world and tossing that epithet at anyone they deem deserving. My advice is wear a mouthguard; it makes it easier to find your teeth.

#231 Alistair McLaughlin on 03.20.19 at 10:58 am

#216 IHTCD9, I assume there are at least some smart and influential policy advisors within CMHC, OSFI, BoC, and/or Finance (excluding the MMT buffoon I quoted yesterday) who strongly weighed in against any attempts to reflate the housing market. Because you know they wanted to, and not just the Liberals. The Conservatives too have been chafing against the stress test; broke wannabe homebuyers are an easily targeted and voting bloc. But someone, somewhere, convinced this government to stay the course, and offer only window dressing. Whoever it was, I thank them.

I am especially surprised that the 30 year insured mortgage did not make a return. It was basically reported as a done deal by every major news outlet (and here as well). Either there was strong resistance to the idea within CMHC itself, or the Liberals are holding off on 30 year amorts so they can offer it up as an election goodie.

#232 IHCTD9 on 03.20.19 at 11:02 am

#180 Nonplused on 03.20.19 at 12:40 am

I am sure there is still a black market that is alive and well in Canada, but outside of drugs and prostitution I doubt it’s very big. Even a simple car repair can easily cost over $1000 these days and nobody carries that kind of cash. It would be very risky to operate a business under the table to a very large scale in today’s world. You can’t even deposit anything over $10,000 cash without the RCMP getting a report from the bank, if the bank will even take it. They literally do not want to take it.
____

Maybe it depends on the area, out my way it’s rife. Every trade you can name, and half the services. No big ticket stuff though, 100.00-5000.00.

Lots of folks have cash, dabbling in the cash economy creates it, and most don’t bother banking it – pretty much everyone has a day job and the cash stuff is on the side.

One year I sold a lot of my junk and before I knew it there was over 10k in cash sitting there. It never hit the bank as it was just turned around to fund new purchases.

Out here I’d guess over half the working population has something going on the side. If this were true throughout Canada, the cash economy would be 100’s of billions per year. Personally, I think all added together, the cash economy is huge in Canada.

I can only imagine the stack of bills a roofer or mechanic has sitting in his house.

#233 NoName on 03.20.19 at 11:04 am

@fartz

205 crowdedelevatorfartz on 03.20.19 at 8:12 am
and just when you thought the MSM couldnt be more irrelevant …..

https://www.apnews.com/e543db5476c749038435279edf2fd60f

There is funny thing about Bend, small and relatively expensive city what in a middle of the nowhere. But they have that deschutes brewery and film festival going for them. If you come across deschutess’s black but xxx get some you’ll definitely like it. (If your first tough was anything other than a beer aged in bourbon casks internet has ruined you)

32 min long but definitely become ALL EARS and listen first 4-5min, something about papers and stuff.

https://youtu.be/7jCjgr5OszY

#234 Prairieboy43 on 03.20.19 at 11:06 am

“Laughter is the best Medicine”. Smoking Man is the Dr.
PB43

#235 X on 03.20.19 at 11:08 am

family income is 400K, splits with his wife

200 a piece

Total income $ 200,000
Federal tax $ 43,507
Provincial tax $ 26,756
CPP/EI premiums $ 3,452
Total tax $ 73,715
After-tax income $ 126,285
Average tax rate 36.86 %
Marginal tax rate 47.97 %

WHINER – 252.5K a year net family income

Split how? – Garth

Factor in Property taxes, consumption taxes, embedded taxes like in gas, how much is really left. The gov’t takes over half of your money.

#236 Figure it Out on 03.20.19 at 11:20 am

It would appear that the key to happiness is to only look at your net pay, and not your gross. Also, don’t think about sales tax, gas tax, carbon tax, et cetera.

Whatever your station in life, there are ten people out there who only pay half as much tax as you do, and who would trade places in an instant.

#237 Mattl on 03.20.19 at 11:21 am

#221 My Big Sister Told Me on 03.20.19 at 9:52 am
I am not part of the 1%, but getting there. Let me just say this… any high income earner who feels penny pinched like this guy has no idea where the money they do have is going.

I suggest you sit down and look at your personal budget… and just how much of your discretionary spending you are spending on your kids and your personal perks. It will blow your mind.

Then start taking time to volunteer in your community (and no, going to fundraising diners doesn’t count). Your child’s situation vs the rest of the world’s should cause you to pause and rethink your position. And don’t forget to bring your children with you. You’ve just lost touch with reality… claim it back.

__________________________________________

Well duh, we are lucky to live in Canada. This goes without saying and is applicable to all income classes. In fact the lower your are on the income scale the more fortunate you are to live in Canada. The 1% will live well almost anywhere – and in some countries like the US much better. Try being the bottom 5% in most other countries, not a good place to be. You can literally do nothing in Canada, live off the government, drink beer and get fat.

The conversation we are having is around what is fair. I am a big believer in progressive taxes and the social welfare system. Have no problem funding it. But there is an imbalance currently, high income earners are being squeezed.

I don’t want to see others pay higher taxes but does it make sense that a realtor can make 500K, keep 400K in the corp, pay 12% tax on that 400K?

Should a family be punished from a tax perspective because they only have one income? On the days my wife volunteers we put the kid in daycare – I can’t claim that because we have one income. But two teachers making 100K each with gravy DB pensions can claim their child care.

So ya, we are all lucky, but what’s fair? Having a discussion around fairness does not equal whining, or being ungrateful.

And BTW, when you do get into the 1% and see more then half of your last dollars go to the gov’t you may change your tune. I had no issue with taxes when I was at a 28% effective either.

#238 PastThePeak on 03.20.19 at 11:25 am

#229 Alistair McLaughlin on 03.20.19 at 10:58 am

Either there was strong resistance to the idea within CMHC itself, or the Liberals are holding off on 30 year amorts so they can offer it up as an election goodie.
+++++++++++++++++++++++++++++++++++

Maybe just me, but I found this budget to be a bit meh. It sprinkled lots of money around (still spending ever more, deficits continuing on as before), and made some targeted funds to Indigenous, but it didn’t have any big “election year” programs. Lots of window dressing on the housing front, but not much money.

That is not Liberal style.

The only explanation is that the big stuff is reserved for an election platform. Perhaps the 30 year amorts, a much broader pharmacare or national daycare program (maybe both!), environmental program, etc.

#239 IHCTD9 on 03.20.19 at 11:28 am

#172 Al on 03.19.19 at 11:56 pm

“Already 40% of families pay no net tax”. That should not keep being repeated. That percentage is highly misleading to say the least, arrived at when you start subtracting social benefits (CCB) from the actual income tax one pays. We can juice that 40% even higher if we start adding even more social benefits.
____

By all means let’s do it – add all the benefits in, and see who’s left holding the bag.

If 40% of tax payers get all their taxes back, they paid zero net tax. Where is anyone being mislead?

Add in all the other handouts and we’re probably looking at 50% of all Canadians are paying Zero taxes.

Nothing is misleading about the actual facts here IMHO.

#240 millmech on 03.20.19 at 11:32 am

#83 Shawn Allen
So many people do not run the numbers and get to this conclusion as most of the people I know believe that the government will just take their RRSP money back through taxation.
You know add the dividend tax credit, capital gains exemption, TFSA so many ways to save tax and Cam should be utilizing them all
The last time I made 50k/yr was in the 1990s and I have only been a blue collar tradesman. I still do not understand how people keep choosing “yes choosing” low paying careers and then whine and want to take away from people who make better career choices.
I see lots of opportunities for people to advance themselves but it takes hard work(hard work works) and sacrifice.
Our facility posts for training opportunities and advancement in house first, then outside (BC then Canada) and we are bringing in semi retired tradesmen and TFW because getting dirty, doing heavy manual labour is beyond most young Canadians
We do have two young apprentices now in our department that start at $38.50/hr and 1.5 times on Saturday and 2 times on Sunday and still have six positions open for various trades. When we ask the apprentices if they can get their peers to apply for these positions we hear that they can only work days, no weekends, they do not want to get dirty or wet and they have to start at the top no working your way up(max benefits and holidays).

#241 Ubul on 03.20.19 at 11:43 am

#228 Sold Out on 03.20.19 at 10:48 am

Geez Louise, Garth

You could at least thank me for taking heat over your edit of post #11. Talk about triggered. The anti-PC beta crowd here doesn’t have the cojones to go after our gracious host, who actually removed the distasteful reference, but with the courage of anonymity opted to squeak up when I applauded it. If these rugged individuals have the courage of their convictions, they should have no qualms about going out in the real world and tossing that epithet at anyone they deem deserving. My advice is wear a mouthguard; it makes it easier to find your teeth.

===

You are not for #freedomOfopinion, #freedomOfspeech, but the supporter of #freedomOfviolence?

You know which political parties, movements had the same “values”, right?

#242 expat on 03.20.19 at 11:46 am

MF Wrote
-Medical school is a privilege that thousands of students don’t get a chance to “pay dearly for”, even though they would give everything for the opportunity. This is because admittance rates are kept artificially low.

Moreover, time in school hasn’t meant anything since 1986. Everyone and their brother has years spent in school now, and the debt to go along with it.

Medical school is not a privilege, it is hard work to get there. Anyone can do it if they choose. Most don’t do the work required to get into medical school.

So no – it is not a privilege any person can do it if they choose.

Its easier to smoke dope, get a welfare cheque or just not bother.

I know many people who worked their guts out in school from low income homes who took monstrous loans to get their education.
It tires me when those who criticize use silly statements based on envy.

It’s easier to tax them than admit they earned their wealth and should keep it.

Its called choice

#243 IHCTD9 on 03.20.19 at 11:51 am

#229 Alistair McLaughlin on 03.20.19 at 10:58 am

… or the Liberals are holding off on 30 year amorts so they can offer it up as an election goodie.
____

Heh, I never though of that one – I’m not so confused any more.

I’ll try to remember your post – we’ll find out later if you were right.

Granted – it’s exactly the kind of thing you’d expect of the remaining balloon heads in Ottawa. I say 99% this is the reason they didn’t unleash it now.

#244 expat on 03.20.19 at 11:53 am

Here’s a question

Why is it the taxpayers responsibility to provide drinking water to a reserve?

Any rural homeowner drills their own well.
But no, its easier for the chiefs to complain instead of deploying the billions they receive from a broken taxpayer.

#245 not 1st on 03.20.19 at 11:59 am

These people saying they are 1%ers are hilarious. Unless you have a liquid million plus in the equity market, you are not in the 1%. Your house, job and pension plan don’t count.

#246 Gravy Train on 03.20.19 at 12:06 pm

#223 PastThePeak on 03.20.19 at 9:56 am
“It is just that the top 20% are paying for 65% of it (on an income tax basis).” True, but that same 20% are earning half of the income (see blog post). While this may seem unfair—from different perspectives and for different reasons—income inequality is greater in the U.S. than in Canada (as measured by the Gini coefficient.)
https://en.wikipedia.org/wiki/Lorenz_curve
https://en.wikipedia.org/wiki/Gini_coefficient
https://en.wikipedia.org/wiki/List_of_countries_by_income_equality
https://en.wikipedia.org/wiki/Pareto_efficiency
http://fortune.com/2015/09/30/america-wealth-inequality/
http://www.oecd.org/social/income-distribution-database.htm

#247 JonBoy on 03.20.19 at 12:07 pm

#135 Ace Goodheart on 03.19.19 at 9:28 pm
Re: US versus Canada tax rate difference:

I had this same conversation with a group of full time staff the last time we were down in Disneyland.

We were talking about how much higher our taxes are in Canada.

The full time Disneylanders did not agree.

They pointed out that employees in the USA pay a “hidden tax” in the form of health insurance premiums. I was told this amounted to between $7000 US and $12000 US, per year, deducted directly from their pay cheques. This works out to around $10,000 to $17,000 CDN per year in “hidden tax”.

—–

Ace, I lived in the USA for seven years. A few things to note:

1. Your health insurance premiums are tax-deductible
2. For my family and I, I was paying roughly $400/month (wife and two kids) for a plan that was very good, through my employer. That was a “great” plan – cheaper than most – but paying $1000/month would be very atypical.

Living in Texas, where there is no state income tax, with an income of $84K per year, I was paying an effective tax rate of less than 10% after deductions (my wife stays at home, mortgage interest, etc).

Remember, Americans get to deduct mortgage interest which, for most of us, is far more than we’d pay in health insurance premiums and, at worse, about the same.

Believe me, it’s way cheaper to live in the United States UNLESS you have chronic, major health issues. In that case, you’re probably not working very much and you’ll be hitting your maximums on health insurance out-of-pocket expenses each year. Mine were capped at $5K/year but I know friends that are at $15K/year and that’s a tough cookie to swallow if you’re not working or are not making much money…

If you’re healthy, the USA is definitely a lower-tax country compared to Canada, as they allow you to deduct more, pay less and generally have more freedom with your money.

#248 MF on 03.20.19 at 12:12 pm

191 BillyBob on 03.20.19 at 6:07 am

Lol come on BillyBob.

Med school is a privilege. I don’t get your argument.

And I hate to get personal on here (shows you have no argument) but maybe when you were in Canada you should have focused more on your business and less on destroying your health.

Probably would not have been bankrupt and forced to start over somewhere else….or have the the audacity to wax poetic to those who made smarter choices.

MF

#249 smallest fiddle ever on 03.20.19 at 12:14 pm

So rich guy is only very rich instead of incredibly rich? You were right, I have zero sympathy at all.

#250 JonBoy on 03.20.19 at 12:26 pm

#202 Tater on 03.20.19 at 7:57 am
A 25k raise in the top tier works out to $450 bi-weekly. That’s not nothing, that’s close to the average person’s car payment.

——

Why do people have car payments? Because they refuse to save and pay cash, further limiting their ability to approach the 1% (or the 10%, really).

Buying a new car is one of the absolute worst financial decisions a person can make, especially in the early years when they’re trying to build up savings for real estate, kids, pay off education, etc.

Buying a cheap(er) used car, that you pay cash for (even if it’s just a few thousand dollars), will make you appreciate what you have, maintain and care for it properly and allow you to put your money to better use.

I’m a car guy – I love ’em! – but car payments shouldn’t even exist for most people. If they do, they should be for a very cheap, reliable car that is paid off in less than a year. Unfortunately, that requires that you don’t care what others think and don’t aspire to look like you’re wealthy (or “on your way”).

I notice these days that most car payments are advertised for 84 months! 7 years of enslavement, to drive a vehicle worth 20-30% of what you paid by the time it’s finally paid off. What a great way to use hard-earned money!

#251 S on 03.20.19 at 12:29 pm

#225 n1tro on 03.20.19 at 10:27 am

“What a load of shit. So to be a good doctor, you need to play an instrument and have rowed on the varsity rowing team?! The fact that more students are qualifying while seats in medical school (and the # of medical schools) stay consistent is what the quota is about.

I respect the crap out of doctors and what they provide to society but lay off the crap that they are some sort of super human.”

Maybe, but them are the things admission committees are looking for these days. Your terse response might be better directed at them. Now, meeting the criteria I outlined does not in any way make an individual a “super human”, it just makes her/him an outlier.

#252 PeterfromCalgary on 03.20.19 at 12:30 pm

What the country needs is some old school economics. Lets build houses on farmland! Lets stop spending money on recycling garbage and bury or burn it. Lets make electricity with coal! Lets stop paying for lawyers and tell meth heads they have until sundown to leave town.

#253 LivinLarge on 03.20.19 at 12:36 pm

“Something’s fishy here. How on earth does he pay 20K in tax on a 33K bonus”.

I don’t know if this has been pointed out yet but these numbers come from one quarter and not a final Notice of Assessment.

He had so much deducted initially because the tax tables presume that the bonus is a reoccurring income and that presumption pushes all his income up and he gets over taxed. It’s like he’s presumed to be making more than a $100K that he isn’t making. He does say that Q1 bonus is his his highest each year.

The only “real” indicator of what he actually ended up paying in tax would be his Notice of Assessment next year because he gets a lot t of that back at tax time.

#254 Sold Out on 03.20.19 at 12:48 pm

#229 Ubul

I don’t advocate or condone violence in my post, merely point out that freedom of speech comes with consequences. Sometimes the consequences are legal, sometimes physical. Freedom of speech is not freedom from consequences.

#255 Conspicuous Carl on 03.20.19 at 1:10 pm

#248 John Boy Walton

“Unfortunately, that requires that you don’t care what others think and don’t aspire to look like you’re wealthy (or “on your way”).”

Whaaaat??? You don’t believe in conspicuous consumption John Boy??? What are you some yokel from Walton’s Mountain??:)

#256 PastThePeak on 03.20.19 at 1:10 pm

#246 MF on 03.20.19 at 12:12 pm

Med school is a privilege.

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

You lose all credibility with this one.

#257 Bubbles from Sunnyvale Trailer Park on 03.20.19 at 1:12 pm

#250 Peter the Calgarian

“Lets stop paying for lawyers and tell meth heads they have until sundown to leave town.”

Now, now Peter. The meth heads in Sunnyvale Trailer Park are loved by one and all. Ricky had some over for a poker game last night…

#258 Blacksheep on 03.20.19 at 1:20 pm

To those concerned about taking, too much Vitamin D:

https://www.mayoclinic.org/healthy-lifestyle/nutrition-and-healthy-eating/expert-answers/vitamin-d-toxicity/faq-20058108

“What is vitamin D toxicity, and should I worry about it since I take supplements?

Vitamin D toxicity, also called hypervitaminosis D, is a rare but potentially serious condition that occurs when you have excessive amounts of vitamin D in your body.
Vitamin D toxicity is usually caused by megadoses of vitamin D supplements — not by diet or sun exposure.

That’s because your body regulates the amount of vitamin D produced by sun exposure, and even fortified foods don’t contain large amounts of vitamin D.
The main consequence of vitamin D toxicity is a buildup of calcium in your blood (hypercalcemia), which can cause nausea and vomiting, weakness, and frequent urination. Symptoms might progress to bone pain and kidney problems, such as the formation of calcium stones.

Treatment includes stopping vitamin D intake and restricting dietary calcium. Your doctor might also prescribe intravenous fluids and medications, such as corticosteroids or bisphosphonates.

******************
Taking 60,000 international units (IU) a day of vitamin D for several months has been shown to cause toxicity.
******************

This level is many times higher than the Recommended Dietary Allowance (RDA) for most adults of 600 IU of
vitamin D a day. Doses higher than the RDA are sometimes used to treat medical problems such as vitamin D deficiency, but these are given only under the care of a doctor for a specified time frame. Blood levels should be monitored while someone is taking high doses of vitamin D.

As always, talk to your doctor before taking vitamin and mineral supplements.”
—————————————————-
My daily dosage of 5000 IU, is only 1/12 of what’s considered a toxic dosage. Never mind it taking months to become a problem, even at 60,000 IU daily.

But hey, to each his own, enjoy your cold & Flu….

#259 Dougie Lama on 03.20.19 at 1:21 pm

#211 IHCTD9 on 03.20.19 at 8:45 am

” you’d best find out where real contentment comes from.”

Don’t leave us dangling like that cowboy. Tell us where real contentment comes from and remember to keep it clean…:)

#260 Penny Henny on 03.20.19 at 1:26 pm

#83 Shawn Allen on 03.19.19 at 7:26 pm
Apparently then, RRSPs Rock

Penny Henny responded to me:

Shawn you’re a smart guy think about it.
Basic exemption covers the first $12,000.
Old Age exemption is what? Another $6000.
Lets say they are pulling another $4000 each from TFSA.
So we are already at $22,000 tax free/yr each. $44,000 per couple.
No lets add in another $20,000 each from RRSP, taxed at the 20% (in Ontario).
That amounts to $44,000 each for him and his wife and he only had to pay tax on the last $20,000, which would be $4000.
$4000 tax on $44,000 income. Less than 10%

*************************************
Agreed that could work if they have no other income. No old age pension and no CPP and no employment income.
//////////////

Here is a breakdown of my current situation.
Wife and I are retired. 54 and 55.
Income per year – EACH.

TFSA- $5,000 -tax free
Eligible dividends – $5,300 -(tax free with credit)
Capital gains- $7,000 ($3,500 taxable)
Ineligible dividends -$1,200 (full tax)
Interest income- $2,500 (full tax)
RRSP withdrawal- $12,000 (full tax)

Gross income- $33,000
Taxable income- $19,200
Less basic personal exemption- $12,000
So 20.5% tax (Ontario) on remaining $7,200

$1,476 tax payable on $33,000 = 4.47%
No add bad in the Ontario Health care premium, lets say another $450

No doubt these numbers will vary from year to year, sometimes for the better and sometimes for the worse.
And by the way the TFSA will be replenished and topped each year from cash.

#261 PastThePeak on 03.20.19 at 1:27 pm

#244 Gravy Train on 03.20.19 at 12:06 pm
#223 PastThePeak on 03.20.19 at 9:56 am
“It is just that the top 20% are paying for 65% of it (on an income tax basis).” True, but that same 20% are earning half of the income (see blog post). While this may seem unfair—from different perspectives and for different reasons—income inequality is greater in the U.S. than in Canada (as measured by the Gini coefficient.)
+++++++++++++++++++++++++++++++++

Selectively quoting my post to imply a meaning I did not provide.

Anyways, just a couple additional points:
1) Yes, per the chart the top 20% earned about 50 per cent of the income (and paid 65% of income tax). So let’s stop any nonsense of those in the upper incomes not paying a “fair share”. They are already paying “way more” than a fair share.

2) Earning that 50% of all income is not the result of some luck or lottery – jeez ma, lookie here, I am making lots of money, how did that happen? In most cases, it comes from hard work (through school and all working career), good planning, risk taking, and overall generating value for one’s own business or one you work for.

I have absolutely no issue in that those who make more, should pay more income tax. That is only logical and fair. I don’t agree in a progressive system (with escalating levels of % to pay) that becomes punitive though. Taking even 1/2 of a marginal dollar earned, let alone figures above that, is pure confiscation. There is no moral justification for it.

And then there is the envy demonstrated here (and all across the land) – that those who earn more are merely “privileged or lucky”. Sorry, but that just isn’t the case for most, no matter how much bitter jealousy makes some want it to be so.

#262 Alistair McLaughlin on 03.20.19 at 1:27 pm

@#241 IHTCD9, I’m leaning towards the former myself. If they were going to bring back 30s, yesterday’s Budget would have been the ideal time to do it, when pretty much everyone expected it, and they risked letting down a lot of expectant voters by not doing so. The fact that they’ve held off leads me to believe that CMHC and/or Finance are extremely reluctant to go there again. Having done so yesterday would also have pre-empted a potential campaign promise by the NDP to bring 30s back. (Conservatives can’t really promise it since they were the ones who killed the insured 30s back in 2011 or so.)

This is the same government that allowed OSFI to bring in the unpopular stress test, and continues to defend it. I kind of think they’ll tough it out with the rules we’ve got. To their credit. It’s one of the few positive things one can say about this government.

#263 n1tro on 03.20.19 at 1:37 pm

#249 S on 03.20.19 at 12:29 pm
#225 n1tro on 03.20.19 at 10:27 am

Maybe, but them are the things admission committees are looking for these days. Your terse response might be better directed at them. Now, meeting the criteria I outlined does not in any way make an individual a “super human”, it just makes her/him an outlier.
—————————
The fact that the admissions people have to make candidates fluff up their resume goes to the point that the other poster made that medical school being a privilege (which I dont agree with either).

Again, it is the fact is there are limited medical schools in Canada and each year, the class size is like 25 (may be more now) and that is what makes things ridiculous for being accepted. Also, once in, it is very hard to fail out of medical school as the schools want to keep their reputation of accepting and training the best.

If one really wants to be a doctor, there are other ways as long as you have $$$ because in the end, you have to get board certified before being able to practice.

#264 IHCTD9 on 03.20.19 at 1:38 pm

#259 Dougie Lama on 03.20.19 at 1:21 pm
#211 IHCTD9 on 03.20.19 at 8:45 am

” you’d best find out where real contentment comes from.”

Don’t leave us dangling like that cowboy. Tell us where real contentment comes from and remember to keep it clean…:)
____

That’s just temporary too :)

Well, until the next round I guess.

#265 Vitamin D on 03.20.19 at 1:44 pm

#258 Blacksheep – The importance of regulating D with A is because D is a fat soluble stored for future use. Its essentially a hormone that the body draws upon when needed. One cannot take too much Vitamin D or the body will go toxic with severe consequences. The number one brand of Cod Liver Oil 2019 is called Carlson from Norway in a 16.9 oz. or 500 ml bottle that can be bought on Amazon.

#266 n1tro on 03.20.19 at 1:46 pm

#254 Sold Out on 03.20.19 at 12:48 pm
#229 Ubul

I don’t advocate or condone violence in my post, merely point out that freedom of speech comes with consequences. Sometimes the consequences are legal, sometimes physical. Freedom of speech is not freedom from consequences.
—————————
Is one of those consequences of freedom of speech being tattled on because a word is may offend some? Shutting down speech over a word which in of itself is meaningless gives it more power to offend.

I remember some triggered people questioning how Garth could dare use the word “chink” in one of his posts last summer(?).

#267 T on 03.20.19 at 1:48 pm

I am in the same boat as this guy.

Income $376,000
Taxes paid $168,000
Property tax paid $9,000

Take home…$199,000

But I am planning on takinbg action…..moving to USA

Enough is enough.

#268 Sold Out on 03.20.19 at 2:08 pm

#239 Ubul, #265 n1tro

As I previously pointed out, I didn’t edit the original post that contained the contentious word. Go whine to the guy that did, or get back to work.

#269 Ponzius Pilatus on 03.20.19 at 2:10 pm

#105 Castle contracting on 03.19.19 at 8:05 pm
I made 500k last year, 100k for office expenses, paid myself 60k, I live cheap. I then paid corporate tax on 340k which is about 12%. It doesn’t pay to be an employee making 300k per year
—————————
Smart boy.
Long live capitalism.
Socialize the losses.
Capitalize the gains.

#270 MF on 03.20.19 at 2:30 pm

#256 PastThePeak on 03.20.19

Point taken.

Apologies to BillyBob. Kudos for taking a risk and being able to turn a bad situation into a good one. Not many can do that.

MF

#271 Bobby on 03.20.19 at 2:42 pm

So, 60% of the population in this once great country now pays for 100% of the income taxes. The expectations of those 40% who pay nothing are those it seems who demand the government provide even more services. What happens then if those paying all the taxes decide it just isn’t worthwhile working anymore and stay home.
And many wonder why someone like Trump gets elected.

#272 IHCTD9 on 03.20.19 at 2:53 pm

#262 Alistair McLaughlin on 03.20.19 at 1:27 pm

To their credit. It’s one of the few positive things one can say about this government.
____

You got that right – and I hope you are correct.

It would be nice to see a decision made that helps Canadians against their will – and exacts a political price to boot; yet it is still done. A little integrity for a change.

Who am I kidding!! We’ll see what the months leading up to October bring…

#273 Sail away on 03.20.19 at 3:11 pm

Such rare company here. So many 1%ers. And all so humbly modest.

Jeff Bezos and I have a combined net worth of $146,280,000,000 USD. To be honest, though, most of that is on Jeff’s side.

#274 Titi on 03.20.19 at 9:45 pm

Garth, income tax is only one of several taxes that people pay.
I am not advocating taxing 1%er more but lower income earners pay a larger percentage of their salary in consumption tax.
So your graph doesn’t tell the whole truth.

#275 Joseph on 03.21.19 at 1:50 pm

Welcome to Canada!!!

There is a myth that Canada is “the greatest country in the world”, but this is mostly Liberal fodder used as opium for the masses. We pay more tax, have fewer options, and incur more red tape than other developed countries. Why do Canadians put up with this crap? Because it’s “safe”, and as one investor told us; “Canadians are conservative, chicken, and cheap”. When it comes to business, Canadians don’t invest and try to make money just skimming the surface. Ask anyone in this country about how understaffed they are at their work, and where many people wear 16 hats…to the point where they don’t even know what their core job is anymore. In a global economy, this is a recipe for disaster, and our government is so out to lunch it is quite scary.

Canadians want more and more, but rather than work for it, they just figure it’s much easier to just ask the government for a “free lunch”…that someone else has to pay for. Liberals do not have any capacity for good governance, and never have; they only know the short sighted tactics for winning votes in order to stay in power. Deficit spending when the economy is doing well makes no sense, and ultimately, we will pay a high price for this in the long run.

Too many people don’t understand money, and by this, I don’t mean micro/macro economics, finance, or investing, but the history of money, fractional reserve lending, and fiat money…and how this permits the current debt fueled economic growth of the past 40 years.

People can make sarcastic comments all they want, but the fact is that the majority of 1% are not billionaires living the rock star lifestyle, but those who understand money, and how to save and invest to accumulate wealth (having wealth and being a high earner are not the same thing). Hurting those who are ambitious and work hard is why Canada never develops world leading industries as you see in the USA and Germany (and likely never will), but rather, the “rent seeking” activities that underpin our economy (Joseph Stiglitz writes about this).

By mid to late 2020, we should see how this all pans out, which I’ve read won’t be too good for Canada. Hold on to your hats, and enjoy the ride!!!

#276 My Big Sister Told Me on 03.21.19 at 4:05 pm

#237 Mattl
I see your point… but if at some point I no longer find acceptable the amount of tax I am paying as an employee then I should run for office or reorganize myself accordingly (be self employed for example) and take the risk that goes along with it. There are degrees of unfairness… I just think some of the views expressed by the 1% need adjusting.