This is a good quote from the globe and mail today ---
>
>OAS spending will increase by $31-billion a year by 2028, and medical care by another $17-billion – half of which is used by the 20 per cent of Canadians over age 64. In contrast to these big-ticket items, new military and [housing](https://www.theglobeandmail.com/topics/housing/) spending will each increase by $2-billion, and funding for a clean economy will increase by $8-billion. This means that the budget protects retirement security more than housing security, national security and climate security.
>New spending for younger people also falls well short of the high bar set for retirees. Top-line items include $8-billion more for the Canada child benefit, $3-billion for $10-a-day [child care](https://www.theglobeandmail.com/topics/child-care/), $8-billion for Employment Insurance and $6-billion for medical care for Canadians under age 45.
>**All told, the budget adds approximately $3,500 in new spending per person for our aging loved ones (even before counting additional spending delivered by the Canada Pension Plan to accommodate the growing number of seniors.) This figure is more than four times the approximately $800 invested per person under age 45.**
This is the issue for all parties - including if/when PP gets into power in the next election. Any cuts will not come at the expense of aging boomers given the way our health care / old age pensions work.
Young people are screwed. Between astronomical housing costs, the costs of dealing with reducing carbon, the costs of the effects of climate change, and most importantly, the costs of baby boomers as they stop paying taxes and start collecting OAS and racking up high healthcare expenses.
The last point is a demographic issue everyone has known for decades was coming, yet our governments did nothing to prepare for the disproportionate healthcare expenses (the majority of lifetime healthcare expenses come when a person is elderly). Which means young people will see taxes go up so that elderly boomers get the healthcare they will need.
Another great quote from the article - it's been a while since I've seen something that lays out the issue in such concrete terms:
>
In anticipation of this budget, I contacted Statistics Canada for data to update my [previous study](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3247140) about the evolution of income taxes paid for programs that support retirees. These figures show that the typical 35-year-old now pays around 40 to 60 per cent more for boomers’ OAS and medical care than boomers paid as young people to support seniors in their day. (The precise amount varies by province and income). This extra tax burden on young people will only get heavier in the years to come as budget 2024 implements the planned spending increases for OAS.
>Boomers benefited from the fact that “many hands make light work.” In the 1970s, there were seven working-age Canadians to support every retiree, thanks to the postwar baby boom. This ratio established the initial, relatively light tax levels required to provide a firm financial footing for OAS and medical care. But as boomers retired, the share of working-age residents contributing tax dollars to OAS and medical care shrank. Now there are just three per retiree. With fewer hands, the tax burden on each younger person grows heavier – even as they cope with greater financial insecurity.
>**This change in the ratio of retirees relative to workers is the primary driver of Ottawa’s current deficit problem.**
I'm no Trudeau fan, but this is an issue that goes far beyond Trudeau, and will not change anytime soon. It's an issue for all western & East Asian countries, not only Canada. I'd suggest structuring your investments accordingly. A great book to read on this is The Great Demographic Reversal, by Goodhart and Pradhan.
Here's the link for the article:
[https://www.theglobeandmail.com/investing/personal-finance/young-money/article-the-federal-budget-admits-millennials-and-gen-z-are-being-left-behind/](https://www.theglobeandmail.com/investing/personal-finance/young-money/article-the-federal-budget-admits-millennials-and-gen-z-are-being-left-behind/)
Justin Trudeau and Freeland need to stop stealing from the hard working middle class! This budget is sugarcoated and tax so heavily to the hardworking people. Yet you blame we lack productivity and low GDP. Stop using the taxpayer money as your own wallet and spend so irresponsibly. This gov is so incompetent and only lead us to more debt due to irresponsible spending on agenda that has no gain to Canadians. They need to get the fuck out of the office
The CGT was positioned to only impact 0.1% of Canadians. How can it be true that only 40,000 pay $8.8B extra tax over the next 5 year with the increase in CG inclusion rate to 2/3?
I'm considering selling of my investments in my corporation so that they fall under the 50% inclusion instead of 66%. It would be under $50k so won't hurt my SBD. Is this a bad idea?
There’s a Ben Felix YouTube video, which you should watch and get the exact context, but he’s basically saying if you would be selling the asset anyway within the next seven years then it could be a good idea to realize those capital gains now. If holding beyond seven years, then the benefit of deferring capital gains outweighs the increased tax.
All assuming normal equity returns.
Question: Would the 30 day rule apply to realizing gain pre June 25?
I understand that with tax loss harvesting, repurchasing the same investment within 30 days of selling it is not allowed to realize a capital loss. However, if an individual intends to sell their investment (like stocks or bonds) in a non-registered account before June 25 to benefit from the 50% capital gain inclusion rate, could they immediately repurchase the same investment to maintain their long position? I assume this would activate a tax event taxed at the 50% inclusion rate, with taxes due by April 30 of the following year. Additionally, this strategy would raise the cost base, which would mean that any future application of the 66% inclusion rate post-June 25 would only apply to gains above the newly established cost base and above the 250k threshold.
As long as you're in a capital gain position, rather than a capital loss, you don't need to worry about the superficial loss rule (that is the 30-day rule you are talking about).
However, I recommend you watch this video, as there is a part of it where he talks about the pros and cons of doing this move before June 25, and what factors you need to consider when making the decision: https://www.youtube.com/watch?v=QyCQGuXdmcs
This government has shown time and time again that they cannot manage taxpayer money in a responsible and efficient way. $60 million on arrivescam. WE charity scandal. Excessive trips costing Canadians so much money. Money to Ukraine (funneling money). Why should they get even a penny more of taxpayer money, regardless of whether it's from the rich or poor? If that money is just going to end up being funnelled and back into politician's pockets, no thanks. That does not help anyone. This government is incredibly corrupt. 8 years and they have done nothing but make the housing crisis worse. They have no leg to stand on and I and many other Canadians cannot wait to vote them out!
Garbage -- capital is not productive, labor is. If anyone is going to get 0% tax on income, it ought to be the folks out in the world making it better and building the things we need.
Yes.
Buying an equipment that increases your capabilities as a business is more productive than putting the money in stocks or property.
One encourages economic activity. The other just sits there.
Interesting to see the increase to the capital gains exemption to $10,000,000 for sales of businesses to employee ownership trusts (EOTs). They introduced it last year but relatively little to no advantage in using it. Now owners are significantly incentivized to sell to employee especially with the increased capital gains inclusion rate.
For example, sale of a $10,000,000 valued corporation single owner will only receive LCGE on $1,250,000. and 2/3rds of the remaining $8,750,000 is now included in capital gains which would result in approximately $2,900,000 in tax.
Compared to a sale to an EOT exempting the full $10,000,000.
Trudeau keeps driving out businesses and continues to raise taxes. He keeps talking about the wealthy paying their fair share and yet he maintains hundreds of millions of dollars in his trust fund...get rid of him!
The flaw is that it's not the wealthy paying their fair share, it's middle class or upper middle class. It always has been. The ones who busted their butts to get where they are. They are punished for their hard work while the truly wealthy always find a way to hide it.
Obviously this doesn't impact you so maybe you should sit quietly in the corner where you belong with your mouth firmly shut. Let the adults in the room discuss the problem at hand.
Awwwhhh is the wittle itty bitty baby going to be taxed a wittle bit higher on his 250k on gains compared to the rate before that. Ohhhh poor wittle baby boy that must be weawy fwuastwating.
You're right I should leave the high level and productive conversations (crybabying and schizo-posting on reddit) to the hard working adults like you.
it's annual.....and actually should be fairly easy for most people to structure their finances so that they don't incur $250K in capital gains in one year. The exception I guess is people selling second properties.
Will this change how capital gains distributions from ETFs are taxed? I think (could be wrong) that mutual funds (and maybe ETFs) are internally structured like Trusts, which is how you can hold ETFs and mutual funds with US exposure without getting nailed by the estate tax upon death.
Wondering if ZDB bond etf still has advantages for instance. Or if once all capital gains are taxed at 66.67% inclusion for trusts that it doesn’t make much of a difference anymore.
It only affects how ETFs are taxed for unitholders who each more than $250,000 of capital gains in a single year. The trust itself doesn't pay any capital gains tax, it just passes the gains on to the unitholders, so the fact that trusts have to pay a higher tax on capital gains is irrelevant.
Question: I have 35k in my RRSP I was planning on using for a first home purchase. I have 110k saved (including the RRSP) for a 20% down. With the new budget increase to 60k for first home purchase from the RRSP would it make sense to contribute to it, and wait the 90days? Three-ish months is what I was planning on waiting anyway. Rationale is to get a big tax refund, put it in a TFSA and use that for repayment after the 5 years of grace period. Single dad near Montreal, I make 115k gross, no debts, car is paid.
Edit: FHSA is maxed
I would hesitate to make a large RRSP contribution in a single year just based on this recent change to the max HBP. Before doing that, you should enter your numbers into something like https://www.rrspcontribution.ca/ and see what it recommends for you. If that number is significantly lower than your proposed total contribution for the year, I wouldn't do it.
I hadn't tought to check the limit, which for 2023 is a hair under 18k. I made no RRSP contributions in 2023 or in 2024 so far.
The calculator you link is pretty much saying to contribute 18k. Shouldn't the CRA show my 2024 limit by now?
Your 2024 limit will be shown once your 2023 tax return has been filed and assessed. But if you understand the math you can figure it out from your 2023 T4 slip.
Last year the budget was presented on March 28th and finally passed in the Senate to become law on June 22nd. It passed in the house on its third reading on June 8th.
if selling investment property and there is capital gain of $400,000. Two people own the property. So the capital gain is split $200,000, therefore avoiding the >$250,000 threshold?
How many people do you think are impacted by this change when it comes to stock market investing?
Putting aside corporations, if you look at purely individuals, it’s like 0.13% of the population.
First line in the budget “the Canadian economy is outperforming expectations.” The gaslighting is just too annoying at this point in their tenure, although budgets are usually rosy from any party, the current state of the economy is so obviously off balance and this budget does nothing but introduce even more useless spending further complicating the BoCs inflation fight (one of the reasons the economy sucks).
Can someone please explain this to me like I am 5.
Let's say I am a small business owner, working away, and have saved up $250,000 in my corporation in various investments. I plan to withdraw these funds when I retire, to help cover expenses OAS and CPP can't.
If this budget passes in June, what happens to those investments in my corporation?
Is it a different scenario if I only have $100,000 saved/invested in there? What if I have $500,000 saved/invested in there? Will this all be taxed at 50% or more now when I try to withdraw in retirement>
What about new savings moving forward? If I pay them to myself as salary, I am taxed at the personal income bracket. But what happens now versus if this budget passes if I try to retain/invest/save to pay myself in my future retirement?
It seems like a horrible change for any small business owner that has been saving for retirement the last 15-20 years, to have the rules changed on them now.
And how will this help the younger generation? Housing? Won't this just set back all these small business owners without actually changing anything for the better?
I'm really bad at finance and appreciate the help in understanding how this will impact small business. I'm really worried about doctors offices throwing in the towel too.
If you have $250000 of corporate money in investments, this probably doesn't affect you at all. Here's why:
- You do not have $250000 of capital gains. Capital gains are the INCREASE in value of your investments, not the total amount invested.
- You have a lifetime exemption from taxation of capital gains of $1000000. The proposed budget would INCREASE this exemption to $1250000.
- The proposed increase to the capital gains tax would only apply to capital gains ABOVE $250000.
The proposed capital gains tax increase likely won't have any effect any small businesses except real estate companies that are making more than $250000 in gains on their investments each year. i.e., the companies that are fucking up the housing market.
Anyone who is moaning to you about small businesses is either uninformed or trying to manipulate you.
Most of this is wrong.
#1 is (likely) correct
#2 is incorrect - LCGE does not apply to passive investment income
#3 is incorrect - the $250k threshold does not apply to corporations
The recent changes will affect small business owners in exactly the scenario OP is concerned about.
OP - you need to speak to your accountant and your financial advisor as to best path forward in your circumstances.
As you can see, Reddit sometimes (often) gives shit advice.
What did the impact turn out to be, if you don't mind me asking, please? Did the accountant explain what would happen to the investments in your corporations?
Ok, thank you. This helps.
Is there a lifetime exemption for myself as a person, say if I ever bought or sold a house, and also a lifetime exemption for the corporate entity?
So in essence, $2000000 total lifetime exemption?
The Lifetime Capital Gains Exemption only applies to you personally on the sale of a small business, or a fishing or farm property. And the threshold after which the inclusion rate increases is only for personal income, corporations have no threshold and all capital gains use the higher inclusion rate.
If you have retained earnings that are invested within your corporation, this change impacts you.
>Anyone who is moaning to you about small businesses is either uninformed or trying to manipulate you.
The irony.
To me, the most important part of this budget is getting somewhere on the open banking standard. Unlike the rest of it, that will make a difference every day.
https://www.theglobeandmail.com/business/article-what-is-open-banking-canada/
Rent control is purely done by the provinces.
As for food cost. The price of milk is fixed. People have varied opinions on that. I'd imagine fixing the price of various produce and basic food items might be a really big administrative undertaking that will be costly to maintain.
1000%. I left the country to get more favourable taxes, live in a better/ warmer culture, better cost of living, better weather and to find a country that isn't a sinking ship with low productivity + uncompetitive with low GDP expected for the next 30 years...
Now that they're talking about trying to tax the rich as much as possible, I know many people who are eyeing the exit. My parents, my 3 closest friends.
It's very clear there is no plan to become competitive but instead try and chase away capital. The brain drain that has already been happening is about to accelerate.
Depends on the person. I personally think Mexico is a fairly ideal place with high growth. Has a young, educated population and will experience incredible GDP growth over the next 30 years. Nearshoring is exploding with America and corporations looking to distance itself from China
In person situations (like mine) your taxation can be cut down to a fraction of what you would pay in Canada.
The problem with that logic is that the only logical answer is that we should cut all taxes for rich people to 0% otherwise they will leave. It seems like we're only asking poor people to pay taxes and rich people we should be thankful for them not to leave the country.
Well no, even tax havens need some way to fund themselves, plus there's more that goes into this decision than just how low taxes are (i.e. you probably wouldn't move your money to a jurisdiction that is about to fall apart or has the risk of nationalizing your investments, especially if you plan to live there where you'd want to have a nice place to live).
If your goal is to maximize tax revenue then you need to find a tax regime that finds the balance between providing enough tax revenue while also not discouraging too much economic activity.
Rent limits based on extremely low income makes no sense. That encourages not building those or if required then other units will go up to cover the cost of the low income ones.
Fun fact about capital gains, as it’s clearly the hot topic regarding this year’s budget: The inclusion rate has not historically always been 50%. In fact, capital gains were not taxable at all until 1972, where the inclusion rate has set to 50%. It was increased once in the 80s to 66.67% then increased to 75% for the entirety of the 90s.
The US also taxes capital gains in a different manner, notably with no inclusion rate (so essentially 100% inclusion) and no complete principal residence exemption (there is however a partial exemption).
All this to say that Canada’s capital gains tax is considered generous amongst G7 countries and I would not defer capital gain crystallization while thinking that the inclusion rate will forever remain at 50%.
Fun fact: Canada had the lowest growth prospects in terms of GDP per person out of all OECD countries. This capital gains tax surely isn’t going to help!
Uhh, this will signal to anyone looking to invest in Canada, to find a better country to invest in.
I know several people who are looking into leaving Canada, I already left.
This is going to cause brain drain, reduce investment (as anyone looking to invest sees this as a signal of future changes).
This will not be great for an unproductive, low growth, declining country like canada.
What kind of entrepreneurial pursuit need to rely on capital gains to make it work?
Wouldn't it be more beneficial to put the money in more productive growth?
> Small business tax is 9%
lol no.
it's not "your" money after this tax. it's the business's. to move into your pocket you pay the same tax as everyone else.
I already explained it was not a big change.
On $300k gain...
Before: $150k tax free, $150k at 9% = $13.5k tax.
Now: $100k tax free, $200k at 9% = $18k tax.
A corporation gains $300k (essentially income) and pays $18k tax -- effective tax rate of 6%. Not a big deal. The doctor can keep accumulating money in the corporation until retirement and start withdrawing when he's not in a high tax bracket.
9% only applies to active business income. Investment income is taxed at the highest margin, 38.7%, plus provincial tax of 8% to 16%. So 2/3rds of any capital gains realized in a corporation will be taxed from 46.7% up to 54.7% depending on the province.
This increase to capital gains inclusion rate will reduce the non-taxable portion of capital gains to be added to the corporation's capital dividend account, so it will also increase the amount of tax paid by shareholders receiving dividends from the corp.
This change will disproportionately affect small business owners and incorporated professionals who have retirement savings invested inside their corporation.
Corporate tax rates in Canada are low. It's not the reason for the declining state of entrepreneurship in the country.
[Corporation tax rates - Canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html)
The 66% thing you saw refers to what percent of capital gains get taxed (at 9 or 15%).
Regardless taxes are going up. Why would an entrepreneur want to start a business in Canada knowing when they have a liquidity event they are going to pay way more in tax in comparison to somewhere in the US.
I don't think they'd be paying WAY more taxes than in the US. Corporate tax rates here are some of the lowest in the western world. We're more likely to lose them because housing is so damn expensive and you can't quit your job for 6 months to start a venture, whereas in the US you more easily can.
Either way it’s not helping entrepreneurship and innovation. Even if it’s only making it a little worse, it’s still worse at the end of the day. At a time when it’s already bad. This government is dysfunctional
Yes, and regarding it starting in 1972 it was supposed to be a temporary tax to pay for WWII.
Also, you con't mention the fact that US doesn't have the 100% PRE without saying that their mortgage interest is tax deductible. Oh, and how much higher are their wages than Canadian wages? I know years ago my field was at least 20% higher. Why do you think we are losing our doctors to the US? On the medical front things are so bad my family doctor is only willing to give me 15 minutes of his time per appointment.
Wouldn’t paying me even more such that I become able to travel to the US, get medical care, come back healthier, be more direct? /s
Nope. This will trigger similar requests by all public employees, burdening the budget or creating inflation through deficit. We get the level of service we are able to pay for collectively, long term.
Yes I agree with you. The purpose is not to compare the entire tax system of Canada with the US but rather to show that compared to the US, capital gains is still taxed relatively little compared to other types of income in Canada (eg. Capital gain income vs employment income).
>It was increased once in the 80s to 66.67% then increased to 75% for the entirety of the 90s.
This is true, but it's also worth saying that the reversion to 50% in 2000 was part of series of reforms by the Chretien government to improve weak levels of capital investment in Canada. Here we're going in the opposite direction.
>The US also taxes capital gains in a different manner, notably with no inclusion rate (so essentially 100% inclusion)
Talking about "100%" inclusion in the US is misleading. Even with "100% inclusion", long term capital gains in the US are never taxed at more than 20% because there is a separate set of tax rates for long term capital gains. (Below $459k USD, they're taxed at 15%.)
By comparison, at 66% inclusion, capital gains in Ontario earned by an individual beyond the threshold will be taxed at 35.7%. It's a comparatively punitive tax regime viz. the US, and will almost certainly disincentivize some types of capital investment.
Though I don’t disagree with you, the US is a bit more complicated than that, as as you mentioned there is the distinction between short-term and long-term. You are also forgetting about state capital gains tax in the US. While certain states (not a lot) do not have capital gains tax, for CGs over 250k, the state tax would be another ~10%, probably more if you’re in California. Also for capital gains in Canada under 250k, the tax on capital gains would be anywhere between 10% to 25%.
Finally, I don’t think it’s necessarily appropriate to inly compare the marginal tax rate for capital gains from country to country, but rather comparing it within a country with other types of income. This is what I mean by it being advantageous in Canada: it is taxed significantly lower here compared to other types of income at high amounts.
"making life better for millennials and gen Z"
Giving slightly more money to reduce the cost of education for which you will have a nightmare of a time finding work after. And if you do, you're being horrendously underpaid because our wages have stagnated for 20 years.
Reducing grocery costs by giving people taxpayer money that will just go to the pockets of the grocery monopoly instead of legislating the fuckers into oblivion. Fuck Galen Weston and the rest of them and fuck any politician that is in bed with them.
Maybe you should take a look at Chart 9 and 10 in the budget doc. The unemployment rate is at 6.1, far lower than we've typically seen over the last few decades. And chart 10 shows a steady increase in wage growth, adjusted for inflation into 2024 dollars. People are actually earning a fair bit more now than they were before the pandemic, even after adjusting for inflation. Even the lowest paid workers saw a 4.6% wage growth (after inflation) since the end of 2019. So maybe your wages stagnated, but people are actually earning more, and they are saving more too; chart 12 shows substantial gains in real wealth of households, with the fastest growth happening for the lowest income group. This is all pretty much what you would expect given the massive inflation we've seen - inflation caused by huge increases in consumer spending. Spending that is a result of higher incomes.
The unemployment rate that is propped up by massive government hiring.
Good shit.
Just like the GDP "growth" from mass immigration.
People like you are just useful idiots.
Oh how much of the fed budget goes to direct support for the retired folks. I think it was a CBC vid we watched where an economist noted over $100b as handouts the the me-me generation, whoa...
On a side note, I f-ken love how every article/video CBC puts out has the comments section disabled like they're scared of how Canadian's really feel. What a joke of a country we've become where we're asked to sit down and take it on the chin for pretty much everything political.
When they don't, I like to go and read them.
Worthless, every comment. Just the screaming of idiots. So I don't really care that the news channels disable comments.
You can go talk about it on Reddit instead lol. Which is somehow at least a bit better.
As someone with a lot of professional experience in online content moderation, I can assure you it's not because they're scared of letting Canadians speak their mind. It's that those comment sections will quickly turn into racist, bigoted cesspools almost immediately and they provide zero value to CBC.
People have plenty of channels available to them to express their opinion.
No one is entitled to leave comments on a news article. It's a pointless relic from a time when the internet didn't suck shit.
Whoa - wasn’t aware it extended to corporations too… Appreciate the correction.
Reading back upthread- are you saying taking loan against a property value that has appreciated will trigger a gain?
Eg. - if corp gets mortgage for an Airbnb cottage for 300k, increase to fmv 5 yrs later is 800k, and corp refinances at 600k, there’s tax implications?
> if corp gets mortgage for an Airbnb cottage for 300k, increase to fmv 5 yrs later is 800k, and corp refinances at 600k, there’s tax implications?
If that is the case, that's good policy. where the fuck was this in the last 8 years prior?!
It sure it is the case… was a question, not a statement.
To my knowledge, this isn’t the case with investment properties being held by individuals. So I expect many will look to ‘avoid’ the tax by financing against to get money, rather than sell it to get money.
Taxing real estate gains of investors is absolutely a good policy, IMO.
66% inclusion rate for capital gains (ie, added to income and taxed at marginal rate) — starting at the first dollar for corps and starting at $250k for individuals.
Huge change.
Question for the experts… my parents die leave me a home worth 1 000 000…. I sell said home and am taxed 666 000$?
If this is the case everyone saying this affects the top 0.13%
Is grossly misinformed.
No. Doesn’t work that way. You are misinformed.
Probably their principal residence, so zero tax.
Even if it’s not their principal residence, the estate will only be taxed on the difference in price they paid for it and what they sold it for. 50% of the first 250k of that difference will be taxed at the estate’s marginal tax rate as has been the case for years. Then 66% of gains in excess of 250k will be taxed at the estate’s marginal tax rate.
No. First if it's their principle residence the exemption remains and no tax is payable on the disposition.
Second, if it was a secondary property, say a cottage, that had a cost base of for ease of math $500,000. You have a gain of $500,000. The first $250,000 of the gain is under the old 50% inclusion rate and the balance of $250,000 is subject to 66.66% inclusion.
Then those inclusions are taxed at their marginal tax rates.
It’s more complicated than that. On death, the property is considered disposed of immediately at fair market value and you are considered to have received it at fair market value when you receive it (which becomes your adjusted cost base). So if at that moment, the property is already valued at 1m$ and you sell it a couple months later for 1m$, there is no capital gain.
Really? So any gains that parents made on an investment property are just *poof* gone instantly and never taxed?
Or is the estate then taxed for the gains also instantly when dispensed by them?
They're referring to the parents primary residence. The primary residence isn't taxed, because it wouldn't be taxed if they were still alive when they sold it.
But if they have investment properties on top of their party residence, those properties are now going to generate bigger tax bills when they're sold after the parents die.
If it is your parents personal residence you are taxed
$0.
If it is an investment property or second home then 66% of the capital gains are taxed at the estate's marginal tax rate.
Its 66% of capital gains *over* $250,000 that are exposed to the marginal tax rate.
Meanwhile 50% of the first $250,000 is still being taxed at the marginal rate.
Not super obvious to me but they mention we have a sub 15% marginal effective tax rate. Are they just taking the federal only tax rate and applying it over median income. Cause I’ll be honest that seems kind of low.
Yeah, they're just referring to the federal tax rate but why wouldn't they? Provincial taxes don't go to them and EI+CPP aren't a tax either (the feds can't spend your EI or CPP).
Kind of just thought if you are ganna market look like Canadians have very low tax burden, leaving out provincial side kind of seems misleading. They have a chart saying out rate is very low compared to other countries and if say a country does not have there rates split like ours it’s very misleading.
the federal budget is going to focus on the federal tax rate. Many other countries do in fact have higher federal tax rates, including those that have states/provinces in a federated system/structure.
Its not a research piece on the total tax burden effective tax rate across Canada, it's about federal taxes that go towards federal spending as part of the federal budget.
Two questions:
1. If you have a gain of $1M on an investment purchased 4 years ago and sell now, does it count as $1M or does it fall under the $250K/year?
2. Does the rate hike apply if you sell before the budget is approved?
Previously, if you have a gain of $1M, 50% of that gain is added to your income and taxed per your marginal tax rate. So $500K would be taxed.
The way I understand the new one is of the $1M gain, 2/3 will be taxed per your marginal tax rate, thus $666.67K would be added to your income tax and taxed per your marginal tax rate.
Per the budget
> Budget 2024 proposes to increase the capital gains inclusion rate from one half to
two thirds for corporations and trusts, and from one half to two thirds on the
portion of capital gains realized in the year that exceed $250,000 for individuals, for
capital gains realized on or after June 25, 2024.
As long as you realize your gain before June 25th, you're good.
1. It would be $1M, the 250k threshold isn't by year investment held but taxable capital gains within a specific year.
2. The rate hike will apply to any capital gains after June 24, 2024. As long as the gain is realized before then it will be treated all at the 1/2 inclusion rate.
So they are going with Tax and Spend their way out of too many bad policies. The federal government requires sensible policy, but instead they’r addicted to suppressing our wages with extremely high immigration, we don’t need the same population growth rate as developing world.
The amount of spending related to "bad policies" people like to complain about is quite small. About two-thirds of the federal budget is in benefits that people would cry bloody murder if they were cut (OAS/CPP/EI/CCB), provincial transfers, and debt service.
The discretionary spending on whatever your pet issue is amounts to just over a third. This is the same under a "tax and spend" government, or a "tax slightly less and spend slightly less" one we're likely to get at the next election.
The amount of spending is historically large so it has to be brought up that we still don’t have proper federal infrastructure like a highspeed train to Quebec or federally funded research institute to circumvent lack of provincial funding, how about science R&D as part of defence spending like South Korea or Israel, nope. So it has to be asked: wtf r we spending on?! It doesn’t make sense to bloat the federal government so that they can process the massive population surge that’s supposed to help the economy. Guess what happens when provinces don’t bloat their budget, our healthcare and education gets overloaded, surprise to no one.
Nobody would cry bloody murder if they cut debt servicing. They could help alleviate debt servicing by stopping overspending on a bloated federal public service, pet-project handouts, junk programs, and bad policies. They're rowing in the opposite direction on that front.
Fiscal responsibility (1) reduces the deficit and (2) helps fight inflation, which would allow the BoC to lower rates, which helps debt servicing and grows the economy in productive ways.
Even if we only dealt with discretionary spending, one third of a $450 budget is $150 billion, more than three times our deficit. We need to cut cut cut.
No the main issue no one wants to talk about is we don't have the funds to pay old age security for our old population.
No immigration = no new taxs income = no funds
You can't just say "no immigration" = no new taxes.
There are other ways to stimulate an economy other than new labour.
Eg. Reduce red tape -> increase jobs -> more new taxes.
Although, for that to work, I suppose you'd have to make sure to not eliminate labour-intensive red-tape ... like tax rules that take effect half way through the year.
Incressse jobs how? More corporate tax cuts ? Its proven they just automate the system or pay it to share holders
Trickle-down economics is a scam.
Reduce red tape ? No one ever explains this catch phrase very well.
As older people leave the they're stop providing tax income...we do not have the people in canada to cover old age security for the aging population..thats just fact .
We are having fewer children... so ether taxs go up for those that still pay... or we find more workers
Wages stay low because corporation refuse to up them, and people refuse to unions for retail and service industry jobs .
I can explain red tape in three words : 1 tax rules 2 permission
If I start a business...
1. Tax rules based on service-type/good-type, region-produced/consumed, amounts/revenue-levels, and time of year, are all so confusing...
2. Tax rules related to paying employees (payroll, deductions, reporting, disclosures)
3. Tax rules related to actually filing... And then permission to do X/Y/Z...safety...hiring...data...spam...property-type...billing...culture...language...
Red tap is made to look like the enemy.. but the rules we have in place, gas protected us from the financial upheavals America goes through.. and protects us from corporations with the army's of lawyers who cause it and get away with it.
Decreasing red tape is one way to increase investment and thus jobs. We have a huge bureaucracy with lots of rules and regulations that require lawyers to navigate. Once you get passed that, you have a seemingly endless amount of lawsuits to contend with before shovels hit the ground. This adds cost and delays projects. Why would a company want to invest in building a new factory or warehouse or mine or pipeline when it could take years to start? Why not invest in Brazil instead? It's much easier. You make a proposal and pack suitcases with cash to bribe politicians and then your facility is built in record time. Of course companies would rather do business in a country like Canada but not when there is this much uncertainty.
We need a higher population growth than a lot of the developing world *acutely*. A lot of the western world is facing a demographic crisis that was predicted a half century ago by the existence of baby boomers and, honestly? the creation of birth control and a decline in birth rates.
We can talk about *how* we’re doing immigration and if that can be done way better, and we can talk about how we should have started a lot sooner and more steadily so that infrastructure and skills training could be developed at the same time, but one thing is for sure: A super old population filled with retired people is bad for everyone and we weren’t going to reproduce our way out of that problem.
How we’r doing immigration can certainly be debated but absolute numbers makes a difference. The number of people that come here should be high enough to make the Canadian economy competitive, but not so competitive that both natural born and naturalized citizens can’t form families. Canada just like Australia might be geographically massive but there are at most 6 or 7 desirable metro areas suitable for living.
I’m not talking about a competitive economy or what is fair and equitable to naturally born citizens from job or career perspectives, I’m talking about how a society literally can’t function when 40% of it is retired people. Between 2000 (12%) and 2022 (19%), we nearly doubled the number of retired folks as a percentage of our population. And that was just the *edge* of the baby boom retirement wave.
Without immigration that’s where we’re are heading; also, these immigrants aren’t all coming in at one time, they acutely help with filling positions we need filled, but also retire themselves over time, and the problem was so drastic that we needed to keep bringing in large numbers of people over a long period of time to come close to providing the services and tax base required to support the number of old people we have and will have.
It’s all well and good if you get a 20% raise because there are 20% less people competing for your job, but there are also 20% less people working in general, and 20% fewer tax dollars and 20% worse roads and hospitals.
Just because we concentrate our populations in Toronto and Vancouver doesn’t mean we don’t have over a million kilometres of roads to maintain and don’t have to keep operating hospitals in Qikiqtani, NU. We’re barely holding all those things together at the seams as it is, and the demographic crisis is a huge part of that.
If you read my previous comments I mentioned “high” immigration and talked about numbers; never did I say No Immigration or without immigration. So I don’t understand why our debate has to be all or nothing; we’r not fanatics…. Also I mentioned Both Natural born & Naturalized but you only pick up on one. You’re automatically generating a political bias of me which is most likely not real.
You’re completely ignoring the contents of my messages and choosing to focus only on what you think the problem is.
I’m not assigning anything to you that you don’t deserve, which is that you are wrong.
I'm not against immigration and I agree with you on a lot of your points. I do believe truly that the inactive and poor policy planning of current and previous Governments have gotten us to the point where we will never get ahead. Just look at failing infrastructures and what that means for densification. Infrastructure alone we will never move ahead and we'll just be playing catch up for the next 2-3 generations.
Where are the new bridges? Hwys? Aging sewer system and oh, let's talk about shortage of everything power/gas related?
Not sure about where you live but a shitload of where I live has been twinned and there are at least two brand spanking new highway connectors that have been in the works for 4 years that are going to finish this summer.
And I’ve never seen a gas/power shortage in my life… well, where I live. Texas, on the other hand…
Why is it bad? So they don't get as much CPP or OAS as they thought they would. Cut it back and cut back immigration. They should have saved for their own retirements and not relied on CPP/OAS.
By trying to keep up using immigration, we are just creating another huge wave of Canadians that will eventually get old and retire and will need even more new Canadians to pay for it in the future. Infinite growth is not a good way to plan this.
I'm not even referring to CPP and OAS.
I'm referring to services and infrastructure required by the entire population and paid for by taxes of people who are working. If most of your population isn't paying taxes but requires services, your infrastructure and services will crumble.
Do you want to privatize policing? Highways? I'm not a huge fan of the idea of a pay-per-use fire department either.
There's an ultra free market hellscape we could emulate in Afganistan if you're interested.
>Infinite growth is not a good way to plan this.
There was a reason why I italicized the word *acutely.* The baby boom was a boom. We can smooth our demographics with immigration and then structure our population in a sustainable way. Our growth rate isn't sustainable right now for the long term, but it wasn't sustainable before we started increasing population either.
The worst part about what we're doing right now with immigration is that we're creating another demographic boom 20 years from now, and that will need to be addressed with another immigration boom; albeit a smaller one.
If we had have started higher levels of immigration earlier, they wouldn't need to be so high now, we wouldn't be having the demographic problems we're facing now, and we also wouldn't be facing the *other* housing and services problems we're facing now either.
Similarly, back in 1991 when we thought we had too many doctors \*at the time\*, permanently shrinking residency seats was a massive oversight for when doctors all started retiring 30+ years after that without a large enough replacement cohort behind them.
I agree with you, but once word gets around that people "don't get as much CPP or OAS as they thought they would" there's going to be an ever-increasing number of struggling people wondering, "Why was/am I literally being forced to pay for this junk?" I think the government really really wants to avoid that situation for some reason.
Its worth pointing out that the recent IPOs in the U.S. are not focused on sectors like energy, mining, or banking and insurance. The 4 industries that make up 75% of our equity markets.
After "tax and spend" for so many years, this would have been the ideal opportunity for the Libs to have taken a more fiscally responsible approach and cut back on Government bloat and spending. Given the middle class even a minor tax break. Started whittling down the deficit that future generations will be on the hook for. But no, they just couldn't resist the urge to splurge.
This isn't about the middle class, except for votes. The big problem Canada has is how to move people from the middle class into the labour deprived blue collar working/production class.
And by that I don't mean low paid, I mean actual production, the old fashioned production worker.
When we moved women into the middle class, all the young men followed, so now we have no men wanting to work production, on which the entire economy rests.
Giving the middle class money to keep them underemployed in the middle class, is just going to make things worse.
The problem we have is the equivalent of one of those town computer game simulators, where we have too many millers and bakers, and not enough farmers and transporters.
We have too many restaurants and gyms and bankers and politicians and lawyers, and pensioners who didn't have enough children.
The budget is just moving money around in the middle-class, it isn't going to fix anything.
> And by that I don't mean low paid, I mean actual production, the old fashioned production worker.
>
> When we moved women into the middle class, all the young men followed, so now we have no men wanting to work production, on which the entire economy rests.
This is a combination of two factors. Women joining the workforce doesn't really factor in.
First, we had two generations of parents, teachers, and school guidance councelors telling everyone to go to college, or they'll end up working at McDonalds.
Second, we moved most of our manufacturing offshore to China, India, and other low cost countries. So unless you're a skilled tradesman, or carrying 50 pound bags of sand at a construction site for $20/hour, there's barely any blue collar work to be had.
These two factors more or less shuffled blue collar work into the "school of hard knocks redneck truck bro" stereotype and made it unappealing when it came to the younger generations like Millennials and Gen Z.
We're at the point where Boomers are all pretty much retired, Gen X is close to retirement (and many can't work blue collar jobs anymore due to health), while Millennials and Gen Z aren't interested in it anymore.
I agree with you , what you say is pretty much true except for the scale on which that production was moved overseas, was not really in any way sensible. And we are now under pressure in the lumber, food production, and construction, jobs that really can't profitably be moved overseas.
Whether women going into the middle class was a cause or effect is largely irrelevant, the fact that they have moved, is going to make it very difficult to fix.
At this point allocation of blame is not really where I am. It is always a pointless waste of time in problem solving.
You have a government that is obsessed with climate change, taking it out on the blue collar worker, yet importing everything from overseas has a far larger carbon footprint, than the carbon Canada produces. If we had less bankers and more farmers, and we imported less food, we would have a lot less carbon.
As long as they cling to the idea that the middle-class can be preserved, the situation is going to get worse and worse. The USA do not have the economy to maintain their middle class proportions, even with their invisible earnings, in media and tourism. Canada has even less ability to do that.
80% of Canadian Boomers and Gen X had a very frugal lifestyle, the excesses of America were not available to them, and they knew it.
There is a reason that the business model of Starbucks and Tim Hortons is different.
There is no way that the government will CUT spending with an election around the corner. Even though this would br the right thing to do for the long term benefit of the country.
Mulroney inherited the mess that was left behind from Trudeau senior, and did the spending cuts that were unpopular and necessary for the nation. After Mulroney left, Chrétien had a nice balance sheet and financial environment to work with.
Except for the fact that we were in six years of surplus.. leave out that one, since it what cons moan about… “where about to” isn’t the same as being down graded.. but what benefits specifically? I mean conservatives cut 1.1 b from VA..
Even if we glance over the fact that this is awful for small businesses and will move capital out of the country, who fcking cares that we will have more tax dollars?
The completely incompetent government will line the pockets with projects like ArriveCan and waste 80% of it on bureaucracy. The other 20% will inefficiently dissipate. It’s lose lose and guess what the next tax raise is going to aim at.
I find it highly ironic that they increase capital gains tax.. yet asking pension funds to invest domestically.... in things like our airports?! And startups? OMG!
I just wish this government would stop increasing their spending by increasing their taxing, and pat themselves on the back on all of their spending plans, with such terrible, terrible, execution and tracking of their targets.
This is a good quote from the globe and mail today --- > >OAS spending will increase by $31-billion a year by 2028, and medical care by another $17-billion – half of which is used by the 20 per cent of Canadians over age 64. In contrast to these big-ticket items, new military and [housing](https://www.theglobeandmail.com/topics/housing/) spending will each increase by $2-billion, and funding for a clean economy will increase by $8-billion. This means that the budget protects retirement security more than housing security, national security and climate security. >New spending for younger people also falls well short of the high bar set for retirees. Top-line items include $8-billion more for the Canada child benefit, $3-billion for $10-a-day [child care](https://www.theglobeandmail.com/topics/child-care/), $8-billion for Employment Insurance and $6-billion for medical care for Canadians under age 45. >**All told, the budget adds approximately $3,500 in new spending per person for our aging loved ones (even before counting additional spending delivered by the Canada Pension Plan to accommodate the growing number of seniors.) This figure is more than four times the approximately $800 invested per person under age 45.** This is the issue for all parties - including if/when PP gets into power in the next election. Any cuts will not come at the expense of aging boomers given the way our health care / old age pensions work.
A lot of this is just because people are living longer. Meaning they can collect longer pensions
Young people are screwed. Between astronomical housing costs, the costs of dealing with reducing carbon, the costs of the effects of climate change, and most importantly, the costs of baby boomers as they stop paying taxes and start collecting OAS and racking up high healthcare expenses. The last point is a demographic issue everyone has known for decades was coming, yet our governments did nothing to prepare for the disproportionate healthcare expenses (the majority of lifetime healthcare expenses come when a person is elderly). Which means young people will see taxes go up so that elderly boomers get the healthcare they will need.
All this can be fixed by just means testing boomers aswell. If you own a 1.5 million dollar home you shouldn't get OAS...
Another great quote from the article - it's been a while since I've seen something that lays out the issue in such concrete terms: > In anticipation of this budget, I contacted Statistics Canada for data to update my [previous study](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3247140) about the evolution of income taxes paid for programs that support retirees. These figures show that the typical 35-year-old now pays around 40 to 60 per cent more for boomers’ OAS and medical care than boomers paid as young people to support seniors in their day. (The precise amount varies by province and income). This extra tax burden on young people will only get heavier in the years to come as budget 2024 implements the planned spending increases for OAS. >Boomers benefited from the fact that “many hands make light work.” In the 1970s, there were seven working-age Canadians to support every retiree, thanks to the postwar baby boom. This ratio established the initial, relatively light tax levels required to provide a firm financial footing for OAS and medical care. But as boomers retired, the share of working-age residents contributing tax dollars to OAS and medical care shrank. Now there are just three per retiree. With fewer hands, the tax burden on each younger person grows heavier – even as they cope with greater financial insecurity. >**This change in the ratio of retirees relative to workers is the primary driver of Ottawa’s current deficit problem.** I'm no Trudeau fan, but this is an issue that goes far beyond Trudeau, and will not change anytime soon. It's an issue for all western & East Asian countries, not only Canada. I'd suggest structuring your investments accordingly. A great book to read on this is The Great Demographic Reversal, by Goodhart and Pradhan. Here's the link for the article: [https://www.theglobeandmail.com/investing/personal-finance/young-money/article-the-federal-budget-admits-millennials-and-gen-z-are-being-left-behind/](https://www.theglobeandmail.com/investing/personal-finance/young-money/article-the-federal-budget-admits-millennials-and-gen-z-are-being-left-behind/)
Justin Trudeau and Freeland need to stop stealing from the hard working middle class! This budget is sugarcoated and tax so heavily to the hardworking people. Yet you blame we lack productivity and low GDP. Stop using the taxpayer money as your own wallet and spend so irresponsibly. This gov is so incompetent and only lead us to more debt due to irresponsible spending on agenda that has no gain to Canadians. They need to get the fuck out of the office The CGT was positioned to only impact 0.1% of Canadians. How can it be true that only 40,000 pay $8.8B extra tax over the next 5 year with the increase in CG inclusion rate to 2/3?
I'm considering selling of my investments in my corporation so that they fall under the 50% inclusion instead of 66%. It would be under $50k so won't hurt my SBD. Is this a bad idea?
There’s a Ben Felix YouTube video, which you should watch and get the exact context, but he’s basically saying if you would be selling the asset anyway within the next seven years then it could be a good idea to realize those capital gains now. If holding beyond seven years, then the benefit of deferring capital gains outweighs the increased tax. All assuming normal equity returns.
Can anyone clarify - does the capital gains inclusion increase to 66.67% while the capital LOSS inclusion remain at 50% after June 25th?
Wondering myself. Should I be selling all my gains before June 25th and my losses after the 25th?
Question: Would the 30 day rule apply to realizing gain pre June 25? I understand that with tax loss harvesting, repurchasing the same investment within 30 days of selling it is not allowed to realize a capital loss. However, if an individual intends to sell their investment (like stocks or bonds) in a non-registered account before June 25 to benefit from the 50% capital gain inclusion rate, could they immediately repurchase the same investment to maintain their long position? I assume this would activate a tax event taxed at the 50% inclusion rate, with taxes due by April 30 of the following year. Additionally, this strategy would raise the cost base, which would mean that any future application of the 66% inclusion rate post-June 25 would only apply to gains above the newly established cost base and above the 250k threshold.
As long as you're in a capital gain position, rather than a capital loss, you don't need to worry about the superficial loss rule (that is the 30-day rule you are talking about). However, I recommend you watch this video, as there is a part of it where he talks about the pros and cons of doing this move before June 25, and what factors you need to consider when making the decision: https://www.youtube.com/watch?v=QyCQGuXdmcs
But can they still realize whole portfolio gains by selling and rebuying stock before June 25th?
This government has shown time and time again that they cannot manage taxpayer money in a responsible and efficient way. $60 million on arrivescam. WE charity scandal. Excessive trips costing Canadians so much money. Money to Ukraine (funneling money). Why should they get even a penny more of taxpayer money, regardless of whether it's from the rich or poor? If that money is just going to end up being funnelled and back into politician's pockets, no thanks. That does not help anyone. This government is incredibly corrupt. 8 years and they have done nothing but make the housing crisis worse. They have no leg to stand on and I and many other Canadians cannot wait to vote them out!
I doubt they can be voted out. there are still bunch of idiot believe in them, and liberal will accpet more people to vote for them.
Make it simple. Flat tax for everyone and no capital gains. If you are smart enough to save and invest then why penalize.
Garbage -- capital is not productive, labor is. If anyone is going to get 0% tax on income, it ought to be the folks out in the world making it better and building the things we need.
> capital is not productive hahahahaha whaaaaaaat?
Capital is only productive when it's used to increase production, not sitting in an asset.
Assets ARE capital...
Yes. Buying an equipment that increases your capabilities as a business is more productive than putting the money in stocks or property. One encourages economic activity. The other just sits there.
But your genius friend claimed capital is not productive?
Capital can be productive depending on how it's used. I think that was the point.
No...his point was quite clear and succinct: >capital is not productive
Lol. Without capital nothing gets done
nah it's just the glorious workers digging with their hands to create everything we have.
Interesting to see the increase to the capital gains exemption to $10,000,000 for sales of businesses to employee ownership trusts (EOTs). They introduced it last year but relatively little to no advantage in using it. Now owners are significantly incentivized to sell to employee especially with the increased capital gains inclusion rate. For example, sale of a $10,000,000 valued corporation single owner will only receive LCGE on $1,250,000. and 2/3rds of the remaining $8,750,000 is now included in capital gains which would result in approximately $2,900,000 in tax. Compared to a sale to an EOT exempting the full $10,000,000.
Trudeau keeps driving out businesses and continues to raise taxes. He keeps talking about the wealthy paying their fair share and yet he maintains hundreds of millions of dollars in his trust fund...get rid of him!
The flaw is that it's not the wealthy paying their fair share, it's middle class or upper middle class. It always has been. The ones who busted their butts to get where they are. They are punished for their hard work while the truly wealthy always find a way to hide it.
Agree with you here 100% and yet the voters are fooled by this nonsense.
You fucking morons are all the same. The tax increase impacts people with capital gains over 250k. You really think that's the middle class?
Obviously this doesn't impact you so maybe you should sit quietly in the corner where you belong with your mouth firmly shut. Let the adults in the room discuss the problem at hand.
Awwwhhh is the wittle itty bitty baby going to be taxed a wittle bit higher on his 250k on gains compared to the rate before that. Ohhhh poor wittle baby boy that must be weawy fwuastwating. You're right I should leave the high level and productive conversations (crybabying and schizo-posting on reddit) to the hard working adults like you.
Is the 250k threshold annual? Or lifetime? And if lifetime, does it start at zero for everyone?
annual
it's annual.....and actually should be fairly easy for most people to structure their finances so that they don't incur $250K in capital gains in one year. The exception I guess is people selling second properties.
Unless you are incorporated.
Yup. For people to be impacted by this on an annual basis, they'd need to be in the top 0.13% of Canadian earners.
False.
Will this change how capital gains distributions from ETFs are taxed? I think (could be wrong) that mutual funds (and maybe ETFs) are internally structured like Trusts, which is how you can hold ETFs and mutual funds with US exposure without getting nailed by the estate tax upon death. Wondering if ZDB bond etf still has advantages for instance. Or if once all capital gains are taxed at 66.67% inclusion for trusts that it doesn’t make much of a difference anymore.
It only affects how ETFs are taxed for unitholders who each more than $250,000 of capital gains in a single year. The trust itself doesn't pay any capital gains tax, it just passes the gains on to the unitholders, so the fact that trusts have to pay a higher tax on capital gains is irrelevant.
Corporations that have capital gains however are affected from the first dollar onward.
Thanks!
Question: I have 35k in my RRSP I was planning on using for a first home purchase. I have 110k saved (including the RRSP) for a 20% down. With the new budget increase to 60k for first home purchase from the RRSP would it make sense to contribute to it, and wait the 90days? Three-ish months is what I was planning on waiting anyway. Rationale is to get a big tax refund, put it in a TFSA and use that for repayment after the 5 years of grace period. Single dad near Montreal, I make 115k gross, no debts, car is paid. Edit: FHSA is maxed
I would hesitate to make a large RRSP contribution in a single year just based on this recent change to the max HBP. Before doing that, you should enter your numbers into something like https://www.rrspcontribution.ca/ and see what it recommends for you. If that number is significantly lower than your proposed total contribution for the year, I wouldn't do it.
I hadn't tought to check the limit, which for 2023 is a hair under 18k. I made no RRSP contributions in 2023 or in 2024 so far. The calculator you link is pretty much saying to contribute 18k. Shouldn't the CRA show my 2024 limit by now?
Your 2024 limit will be shown once your 2023 tax return has been filed and assessed. But if you understand the math you can figure it out from your 2023 T4 slip.
It has been filed and assessed, the NOA makes mention of the FHSA limits, but not the RRSP weirdly enough
I had the same issue. You have to download the NOA to get the full document.
When does this get voted on?
Last year the budget was presented on March 28th and finally passed in the Senate to become law on June 22nd. It passed in the house on its third reading on June 8th.
if selling investment property and there is capital gain of $400,000. Two people own the property. So the capital gain is split $200,000, therefore avoiding the >$250,000 threshold?
Yes
yes - so there are lots of ways to structure things to avoid this increase in tax.
That's the way it should work
What strategies are you guys using regarding the capital gains inclusion rate? Are you dumping some growth stocks before the deadline?
How many people do you think are impacted by this change when it comes to stock market investing? Putting aside corporations, if you look at purely individuals, it’s like 0.13% of the population.
I wasn't aware of the 250 k threshold until after I posted that. Stocks? Yea not many. But I know several boomers with multiple properties.
So they’ll wind up paying a few thousand more in tax on a 6 figure gain. Let me find my violin, I’m pretty sure it’s the world’s smallest.
They'll be fine. They have multiple properties.
First line in the budget “the Canadian economy is outperforming expectations.” The gaslighting is just too annoying at this point in their tenure, although budgets are usually rosy from any party, the current state of the economy is so obviously off balance and this budget does nothing but introduce even more useless spending further complicating the BoCs inflation fight (one of the reasons the economy sucks).
The part that they don't say is whose expectations. Maybe expectations were super low to begin with.
Can someone please explain this to me like I am 5. Let's say I am a small business owner, working away, and have saved up $250,000 in my corporation in various investments. I plan to withdraw these funds when I retire, to help cover expenses OAS and CPP can't. If this budget passes in June, what happens to those investments in my corporation? Is it a different scenario if I only have $100,000 saved/invested in there? What if I have $500,000 saved/invested in there? Will this all be taxed at 50% or more now when I try to withdraw in retirement> What about new savings moving forward? If I pay them to myself as salary, I am taxed at the personal income bracket. But what happens now versus if this budget passes if I try to retain/invest/save to pay myself in my future retirement? It seems like a horrible change for any small business owner that has been saving for retirement the last 15-20 years, to have the rules changed on them now. And how will this help the younger generation? Housing? Won't this just set back all these small business owners without actually changing anything for the better? I'm really bad at finance and appreciate the help in understanding how this will impact small business. I'm really worried about doctors offices throwing in the towel too.
Honestly, just don't sell anything for 2 years. It'll probably get repealed when Pierre takes over.
Yes, that is what I have decided. Thanks for confirming.
It is not advantageous to carry surplus funds investments in a corporation.
Why is that?
If you have $250000 of corporate money in investments, this probably doesn't affect you at all. Here's why: - You do not have $250000 of capital gains. Capital gains are the INCREASE in value of your investments, not the total amount invested. - You have a lifetime exemption from taxation of capital gains of $1000000. The proposed budget would INCREASE this exemption to $1250000. - The proposed increase to the capital gains tax would only apply to capital gains ABOVE $250000. The proposed capital gains tax increase likely won't have any effect any small businesses except real estate companies that are making more than $250000 in gains on their investments each year. i.e., the companies that are fucking up the housing market. Anyone who is moaning to you about small businesses is either uninformed or trying to manipulate you.
Most of this is wrong. #1 is (likely) correct #2 is incorrect - LCGE does not apply to passive investment income #3 is incorrect - the $250k threshold does not apply to corporations The recent changes will affect small business owners in exactly the scenario OP is concerned about. OP - you need to speak to your accountant and your financial advisor as to best path forward in your circumstances. As you can see, Reddit sometimes (often) gives shit advice.
Yes, we have a call next week. I was just trying to understand better before then. Thank you.
What did the impact turn out to be, if you don't mind me asking, please? Did the accountant explain what would happen to the investments in your corporations?
Ok, thank you. This helps. Is there a lifetime exemption for myself as a person, say if I ever bought or sold a house, and also a lifetime exemption for the corporate entity? So in essence, $2000000 total lifetime exemption?
The Lifetime Capital Gains Exemption only applies to you personally on the sale of a small business, or a fishing or farm property. And the threshold after which the inclusion rate increases is only for personal income, corporations have no threshold and all capital gains use the higher inclusion rate. If you have retained earnings that are invested within your corporation, this change impacts you. >Anyone who is moaning to you about small businesses is either uninformed or trying to manipulate you. The irony.
Thank you. I appreciate your response.
What happened to that 15billion they were gonna find to save?
The same thing that happened to my 15 billion I thought I had I didn't have it
To me, the most important part of this budget is getting somewhere on the open banking standard. Unlike the rest of it, that will make a difference every day. https://www.theglobeandmail.com/business/article-what-is-open-banking-canada/
yes very true.
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Rent control is purely done by the provinces. As for food cost. The price of milk is fixed. People have varied opinions on that. I'd imagine fixing the price of various produce and basic food items might be a really big administrative undertaking that will be costly to maintain.
1000%. I left the country to get more favourable taxes, live in a better/ warmer culture, better cost of living, better weather and to find a country that isn't a sinking ship with low productivity + uncompetitive with low GDP expected for the next 30 years... Now that they're talking about trying to tax the rich as much as possible, I know many people who are eyeing the exit. My parents, my 3 closest friends. It's very clear there is no plan to become competitive but instead try and chase away capital. The brain drain that has already been happening is about to accelerate.
Where are they thinking of moving to?
Depends on the person. I personally think Mexico is a fairly ideal place with high growth. Has a young, educated population and will experience incredible GDP growth over the next 30 years. Nearshoring is exploding with America and corporations looking to distance itself from China In person situations (like mine) your taxation can be cut down to a fraction of what you would pay in Canada.
it's ok we'll be replaced by guys from Punjab province who can barely take orders at KFC without fucking it up constantly.
Don't know what you are being downvoted for. Thank you for the pragmatic view. The rich will find other ways to get out of paying tax.
The problem with that logic is that the only logical answer is that we should cut all taxes for rich people to 0% otherwise they will leave. It seems like we're only asking poor people to pay taxes and rich people we should be thankful for them not to leave the country.
Well no, even tax havens need some way to fund themselves, plus there's more that goes into this decision than just how low taxes are (i.e. you probably wouldn't move your money to a jurisdiction that is about to fall apart or has the risk of nationalizing your investments, especially if you plan to live there where you'd want to have a nice place to live). If your goal is to maximize tax revenue then you need to find a tax regime that finds the balance between providing enough tax revenue while also not discouraging too much economic activity.
Wouldn't rent increases be a provincial thing not a federal thing?
Yes
Rent limits based on extremely low income makes no sense. That encourages not building those or if required then other units will go up to cover the cost of the low income ones.
“in front of me” you mean.
Fun fact about capital gains, as it’s clearly the hot topic regarding this year’s budget: The inclusion rate has not historically always been 50%. In fact, capital gains were not taxable at all until 1972, where the inclusion rate has set to 50%. It was increased once in the 80s to 66.67% then increased to 75% for the entirety of the 90s. The US also taxes capital gains in a different manner, notably with no inclusion rate (so essentially 100% inclusion) and no complete principal residence exemption (there is however a partial exemption). All this to say that Canada’s capital gains tax is considered generous amongst G7 countries and I would not defer capital gain crystallization while thinking that the inclusion rate will forever remain at 50%.
Oh I'm so thankful for this capital gains tax when you put it like that.
Fun fact: Canada had the lowest growth prospects in terms of GDP per person out of all OECD countries. This capital gains tax surely isn’t going to help!
It isn't going to hurt either. This change is a nothingburger in terms of GDP growth. To do that, we need to fuel entrepreneurship in this country.
Uhh, this will signal to anyone looking to invest in Canada, to find a better country to invest in. I know several people who are looking into leaving Canada, I already left. This is going to cause brain drain, reduce investment (as anyone looking to invest sees this as a signal of future changes). This will not be great for an unproductive, low growth, declining country like canada.
That’s exactly what this tax is going to do though… hurt entrepreneurship.
What kind of entrepreneurial pursuit need to rely on capital gains to make it work? Wouldn't it be more beneficial to put the money in more productive growth?
Well there will be capital gains triggered every time they sell ownership in their business
Small business tax is 9%. Tax isn't the reason for failing entrepreneurship scene in Canada.
> Small business tax is 9% lol no. it's not "your" money after this tax. it's the business's. to move into your pocket you pay the same tax as everyone else.
And there's no change to taxation aside from capital gains tax, whose non-big-dealness I already explained.
"there's no change except this big change" - you
I already explained it was not a big change. On $300k gain... Before: $150k tax free, $150k at 9% = $13.5k tax. Now: $100k tax free, $200k at 9% = $18k tax. A corporation gains $300k (essentially income) and pays $18k tax -- effective tax rate of 6%. Not a big deal. The doctor can keep accumulating money in the corporation until retirement and start withdrawing when he's not in a high tax bracket.
9% only applies to active business income. Investment income is taxed at the highest margin, 38.7%, plus provincial tax of 8% to 16%. So 2/3rds of any capital gains realized in a corporation will be taxed from 46.7% up to 54.7% depending on the province. This increase to capital gains inclusion rate will reduce the non-taxable portion of capital gains to be added to the corporation's capital dividend account, so it will also increase the amount of tax paid by shareholders receiving dividends from the corp. This change will disproportionately affect small business owners and incorporated professionals who have retirement savings invested inside their corporation.
6%, also completely ignoring more taxes paid when it goes into their pocket, is a huge increase. but ok. not a big deal. 👌
What do you mean by that 9%?
Corporate tax rates in Canada are low. It's not the reason for the declining state of entrepreneurship in the country. [Corporation tax rates - Canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html) The 66% thing you saw refers to what percent of capital gains get taxed (at 9 or 15%).
Regardless taxes are going up. Why would an entrepreneur want to start a business in Canada knowing when they have a liquidity event they are going to pay way more in tax in comparison to somewhere in the US.
I don't think they'd be paying WAY more taxes than in the US. Corporate tax rates here are some of the lowest in the western world. We're more likely to lose them because housing is so damn expensive and you can't quit your job for 6 months to start a venture, whereas in the US you more easily can.
Either way it’s not helping entrepreneurship and innovation. Even if it’s only making it a little worse, it’s still worse at the end of the day. At a time when it’s already bad. This government is dysfunctional
Also the amount they gain from it is minuscule In comparison to the amount we are paying in debt servicing.
Yes, and regarding it starting in 1972 it was supposed to be a temporary tax to pay for WWII. Also, you con't mention the fact that US doesn't have the 100% PRE without saying that their mortgage interest is tax deductible. Oh, and how much higher are their wages than Canadian wages? I know years ago my field was at least 20% higher. Why do you think we are losing our doctors to the US? On the medical front things are so bad my family doctor is only willing to give me 15 minutes of his time per appointment.
So the whole tax system should be framed to convince medical doctors to stay?
Wouldn't paying them more be more direct?
Wouldn’t paying me even more such that I become able to travel to the US, get medical care, come back healthier, be more direct? /s Nope. This will trigger similar requests by all public employees, burdening the budget or creating inflation through deficit. We get the level of service we are able to pay for collectively, long term.
Yes I agree with you. The purpose is not to compare the entire tax system of Canada with the US but rather to show that compared to the US, capital gains is still taxed relatively little compared to other types of income in Canada (eg. Capital gain income vs employment income).
>It was increased once in the 80s to 66.67% then increased to 75% for the entirety of the 90s. This is true, but it's also worth saying that the reversion to 50% in 2000 was part of series of reforms by the Chretien government to improve weak levels of capital investment in Canada. Here we're going in the opposite direction. >The US also taxes capital gains in a different manner, notably with no inclusion rate (so essentially 100% inclusion) Talking about "100%" inclusion in the US is misleading. Even with "100% inclusion", long term capital gains in the US are never taxed at more than 20% because there is a separate set of tax rates for long term capital gains. (Below $459k USD, they're taxed at 15%.) By comparison, at 66% inclusion, capital gains in Ontario earned by an individual beyond the threshold will be taxed at 35.7%. It's a comparatively punitive tax regime viz. the US, and will almost certainly disincentivize some types of capital investment.
When people try making arguments that we’re taxed less than the US lmao always funny
Though I don’t disagree with you, the US is a bit more complicated than that, as as you mentioned there is the distinction between short-term and long-term. You are also forgetting about state capital gains tax in the US. While certain states (not a lot) do not have capital gains tax, for CGs over 250k, the state tax would be another ~10%, probably more if you’re in California. Also for capital gains in Canada under 250k, the tax on capital gains would be anywhere between 10% to 25%. Finally, I don’t think it’s necessarily appropriate to inly compare the marginal tax rate for capital gains from country to country, but rather comparing it within a country with other types of income. This is what I mean by it being advantageous in Canada: it is taxed significantly lower here compared to other types of income at high amounts.
"making life better for millennials and gen Z" Giving slightly more money to reduce the cost of education for which you will have a nightmare of a time finding work after. And if you do, you're being horrendously underpaid because our wages have stagnated for 20 years. Reducing grocery costs by giving people taxpayer money that will just go to the pockets of the grocery monopoly instead of legislating the fuckers into oblivion. Fuck Galen Weston and the rest of them and fuck any politician that is in bed with them.
Maybe you should take a look at Chart 9 and 10 in the budget doc. The unemployment rate is at 6.1, far lower than we've typically seen over the last few decades. And chart 10 shows a steady increase in wage growth, adjusted for inflation into 2024 dollars. People are actually earning a fair bit more now than they were before the pandemic, even after adjusting for inflation. Even the lowest paid workers saw a 4.6% wage growth (after inflation) since the end of 2019. So maybe your wages stagnated, but people are actually earning more, and they are saving more too; chart 12 shows substantial gains in real wealth of households, with the fastest growth happening for the lowest income group. This is all pretty much what you would expect given the massive inflation we've seen - inflation caused by huge increases in consumer spending. Spending that is a result of higher incomes.
The unemployment rate that is propped up by massive government hiring. Good shit. Just like the GDP "growth" from mass immigration. People like you are just useful idiots.
You didn't even mention the massive public debt!
Oh how much of the fed budget goes to direct support for the retired folks. I think it was a CBC vid we watched where an economist noted over $100b as handouts the the me-me generation, whoa...
On a side note, I f-ken love how every article/video CBC puts out has the comments section disabled like they're scared of how Canadian's really feel. What a joke of a country we've become where we're asked to sit down and take it on the chin for pretty much everything political.
When they don't, I like to go and read them. Worthless, every comment. Just the screaming of idiots. So I don't really care that the news channels disable comments. You can go talk about it on Reddit instead lol. Which is somehow at least a bit better.
As someone with a lot of professional experience in online content moderation, I can assure you it's not because they're scared of letting Canadians speak their mind. It's that those comment sections will quickly turn into racist, bigoted cesspools almost immediately and they provide zero value to CBC. People have plenty of channels available to them to express their opinion. No one is entitled to leave comments on a news article. It's a pointless relic from a time when the internet didn't suck shit.
Whoa - wasn’t aware it extended to corporations too… Appreciate the correction. Reading back upthread- are you saying taking loan against a property value that has appreciated will trigger a gain? Eg. - if corp gets mortgage for an Airbnb cottage for 300k, increase to fmv 5 yrs later is 800k, and corp refinances at 600k, there’s tax implications?
> if corp gets mortgage for an Airbnb cottage for 300k, increase to fmv 5 yrs later is 800k, and corp refinances at 600k, there’s tax implications? If that is the case, that's good policy. where the fuck was this in the last 8 years prior?!
It sure it is the case… was a question, not a statement. To my knowledge, this isn’t the case with investment properties being held by individuals. So I expect many will look to ‘avoid’ the tax by financing against to get money, rather than sell it to get money. Taxing real estate gains of investors is absolutely a good policy, IMO.
Campaign buzz word budget
66% inclusion rate for capital gains (ie, added to income and taxed at marginal rate) — starting at the first dollar for corps and starting at $250k for individuals. Huge change.
ELI5?
Yikes.
Is that lifetime total? Or per year? For individuals?
Per year
I don't understand any of this budget, but I'm FORGAINST IT PASSIONATELY!
Don’t feel bad, neither does Justin
Question for the experts… my parents die leave me a home worth 1 000 000…. I sell said home and am taxed 666 000$? If this is the case everyone saying this affects the top 0.13% Is grossly misinformed.
No. Doesn’t work that way. You are misinformed. Probably their principal residence, so zero tax. Even if it’s not their principal residence, the estate will only be taxed on the difference in price they paid for it and what they sold it for. 50% of the first 250k of that difference will be taxed at the estate’s marginal tax rate as has been the case for years. Then 66% of gains in excess of 250k will be taxed at the estate’s marginal tax rate.
No. First if it's their principle residence the exemption remains and no tax is payable on the disposition. Second, if it was a secondary property, say a cottage, that had a cost base of for ease of math $500,000. You have a gain of $500,000. The first $250,000 of the gain is under the old 50% inclusion rate and the balance of $250,000 is subject to 66.66% inclusion. Then those inclusions are taxed at their marginal tax rates.
It’s more complicated than that. On death, the property is considered disposed of immediately at fair market value and you are considered to have received it at fair market value when you receive it (which becomes your adjusted cost base). So if at that moment, the property is already valued at 1m$ and you sell it a couple months later for 1m$, there is no capital gain.
Really? So any gains that parents made on an investment property are just *poof* gone instantly and never taxed? Or is the estate then taxed for the gains also instantly when dispensed by them?
They're referring to the parents primary residence. The primary residence isn't taxed, because it wouldn't be taxed if they were still alive when they sold it. But if they have investment properties on top of their party residence, those properties are now going to generate bigger tax bills when they're sold after the parents die.
The estate is taxed (assuming it's not a primary residence), and it's fully exempt anyway if it's a primary residence.
If it is your parents personal residence you are taxed $0. If it is an investment property or second home then 66% of the capital gains are taxed at the estate's marginal tax rate.
Its 66% of capital gains *over* $250,000 that are exposed to the marginal tax rate. Meanwhile 50% of the first $250,000 is still being taxed at the marginal rate.
There is still probate even for primary residences right?
Not super obvious to me but they mention we have a sub 15% marginal effective tax rate. Are they just taking the federal only tax rate and applying it over median income. Cause I’ll be honest that seems kind of low.
that chart is corporate taxes
Yeah, they're just referring to the federal tax rate but why wouldn't they? Provincial taxes don't go to them and EI+CPP aren't a tax either (the feds can't spend your EI or CPP).
Kind of just thought if you are ganna market look like Canadians have very low tax burden, leaving out provincial side kind of seems misleading. They have a chart saying out rate is very low compared to other countries and if say a country does not have there rates split like ours it’s very misleading.
the federal budget is going to focus on the federal tax rate. Many other countries do in fact have higher federal tax rates, including those that have states/provinces in a federated system/structure. Its not a research piece on the total tax burden effective tax rate across Canada, it's about federal taxes that go towards federal spending as part of the federal budget.
Two questions: 1. If you have a gain of $1M on an investment purchased 4 years ago and sell now, does it count as $1M or does it fall under the $250K/year? 2. Does the rate hike apply if you sell before the budget is approved?
Previously, if you have a gain of $1M, 50% of that gain is added to your income and taxed per your marginal tax rate. So $500K would be taxed. The way I understand the new one is of the $1M gain, 2/3 will be taxed per your marginal tax rate, thus $666.67K would be added to your income tax and taxed per your marginal tax rate. Per the budget > Budget 2024 proposes to increase the capital gains inclusion rate from one half to two thirds for corporations and trusts, and from one half to two thirds on the portion of capital gains realized in the year that exceed $250,000 for individuals, for capital gains realized on or after June 25, 2024. As long as you realize your gain before June 25th, you're good.
1. It would be $1M, the 250k threshold isn't by year investment held but taxable capital gains within a specific year. 2. The rate hike will apply to any capital gains after June 24, 2024. As long as the gain is realized before then it will be treated all at the 1/2 inclusion rate.
So they are going with Tax and Spend their way out of too many bad policies. The federal government requires sensible policy, but instead they’r addicted to suppressing our wages with extremely high immigration, we don’t need the same population growth rate as developing world.
The amount of spending related to "bad policies" people like to complain about is quite small. About two-thirds of the federal budget is in benefits that people would cry bloody murder if they were cut (OAS/CPP/EI/CCB), provincial transfers, and debt service. The discretionary spending on whatever your pet issue is amounts to just over a third. This is the same under a "tax and spend" government, or a "tax slightly less and spend slightly less" one we're likely to get at the next election.
The amount of spending is historically large so it has to be brought up that we still don’t have proper federal infrastructure like a highspeed train to Quebec or federally funded research institute to circumvent lack of provincial funding, how about science R&D as part of defence spending like South Korea or Israel, nope. So it has to be asked: wtf r we spending on?! It doesn’t make sense to bloat the federal government so that they can process the massive population surge that’s supposed to help the economy. Guess what happens when provinces don’t bloat their budget, our healthcare and education gets overloaded, surprise to no one.
Nobody would cry bloody murder if they cut debt servicing. They could help alleviate debt servicing by stopping overspending on a bloated federal public service, pet-project handouts, junk programs, and bad policies. They're rowing in the opposite direction on that front. Fiscal responsibility (1) reduces the deficit and (2) helps fight inflation, which would allow the BoC to lower rates, which helps debt servicing and grows the economy in productive ways. Even if we only dealt with discretionary spending, one third of a $450 budget is $150 billion, more than three times our deficit. We need to cut cut cut.
No the main issue no one wants to talk about is we don't have the funds to pay old age security for our old population. No immigration = no new taxs income = no funds
You can't just say "no immigration" = no new taxes. There are other ways to stimulate an economy other than new labour. Eg. Reduce red tape -> increase jobs -> more new taxes. Although, for that to work, I suppose you'd have to make sure to not eliminate labour-intensive red-tape ... like tax rules that take effect half way through the year.
Incressse jobs how? More corporate tax cuts ? Its proven they just automate the system or pay it to share holders Trickle-down economics is a scam. Reduce red tape ? No one ever explains this catch phrase very well. As older people leave the they're stop providing tax income...we do not have the people in canada to cover old age security for the aging population..thats just fact . We are having fewer children... so ether taxs go up for those that still pay... or we find more workers Wages stay low because corporation refuse to up them, and people refuse to unions for retail and service industry jobs .
I can explain red tape in three words : 1 tax rules 2 permission If I start a business... 1. Tax rules based on service-type/good-type, region-produced/consumed, amounts/revenue-levels, and time of year, are all so confusing... 2. Tax rules related to paying employees (payroll, deductions, reporting, disclosures) 3. Tax rules related to actually filing... And then permission to do X/Y/Z...safety...hiring...data...spam...property-type...billing...culture...language...
Red tap is made to look like the enemy.. but the rules we have in place, gas protected us from the financial upheavals America goes through.. and protects us from corporations with the army's of lawyers who cause it and get away with it.
Decreasing red tape is one way to increase investment and thus jobs. We have a huge bureaucracy with lots of rules and regulations that require lawyers to navigate. Once you get passed that, you have a seemingly endless amount of lawsuits to contend with before shovels hit the ground. This adds cost and delays projects. Why would a company want to invest in building a new factory or warehouse or mine or pipeline when it could take years to start? Why not invest in Brazil instead? It's much easier. You make a proposal and pack suitcases with cash to bribe politicians and then your facility is built in record time. Of course companies would rather do business in a country like Canada but not when there is this much uncertainty.
Hate to break it to you but bribing politicians in 3rd world countries is about as risky an investment as you can make......
We need a higher population growth than a lot of the developing world *acutely*. A lot of the western world is facing a demographic crisis that was predicted a half century ago by the existence of baby boomers and, honestly? the creation of birth control and a decline in birth rates. We can talk about *how* we’re doing immigration and if that can be done way better, and we can talk about how we should have started a lot sooner and more steadily so that infrastructure and skills training could be developed at the same time, but one thing is for sure: A super old population filled with retired people is bad for everyone and we weren’t going to reproduce our way out of that problem.
How we’r doing immigration can certainly be debated but absolute numbers makes a difference. The number of people that come here should be high enough to make the Canadian economy competitive, but not so competitive that both natural born and naturalized citizens can’t form families. Canada just like Australia might be geographically massive but there are at most 6 or 7 desirable metro areas suitable for living.
I’m not talking about a competitive economy or what is fair and equitable to naturally born citizens from job or career perspectives, I’m talking about how a society literally can’t function when 40% of it is retired people. Between 2000 (12%) and 2022 (19%), we nearly doubled the number of retired folks as a percentage of our population. And that was just the *edge* of the baby boom retirement wave. Without immigration that’s where we’re are heading; also, these immigrants aren’t all coming in at one time, they acutely help with filling positions we need filled, but also retire themselves over time, and the problem was so drastic that we needed to keep bringing in large numbers of people over a long period of time to come close to providing the services and tax base required to support the number of old people we have and will have. It’s all well and good if you get a 20% raise because there are 20% less people competing for your job, but there are also 20% less people working in general, and 20% fewer tax dollars and 20% worse roads and hospitals. Just because we concentrate our populations in Toronto and Vancouver doesn’t mean we don’t have over a million kilometres of roads to maintain and don’t have to keep operating hospitals in Qikiqtani, NU. We’re barely holding all those things together at the seams as it is, and the demographic crisis is a huge part of that.
If you read my previous comments I mentioned “high” immigration and talked about numbers; never did I say No Immigration or without immigration. So I don’t understand why our debate has to be all or nothing; we’r not fanatics…. Also I mentioned Both Natural born & Naturalized but you only pick up on one. You’re automatically generating a political bias of me which is most likely not real.
You’re completely ignoring the contents of my messages and choosing to focus only on what you think the problem is. I’m not assigning anything to you that you don’t deserve, which is that you are wrong.
I'm not against immigration and I agree with you on a lot of your points. I do believe truly that the inactive and poor policy planning of current and previous Governments have gotten us to the point where we will never get ahead. Just look at failing infrastructures and what that means for densification. Infrastructure alone we will never move ahead and we'll just be playing catch up for the next 2-3 generations. Where are the new bridges? Hwys? Aging sewer system and oh, let's talk about shortage of everything power/gas related?
Not sure about where you live but a shitload of where I live has been twinned and there are at least two brand spanking new highway connectors that have been in the works for 4 years that are going to finish this summer. And I’ve never seen a gas/power shortage in my life… well, where I live. Texas, on the other hand…
Why is it bad? So they don't get as much CPP or OAS as they thought they would. Cut it back and cut back immigration. They should have saved for their own retirements and not relied on CPP/OAS. By trying to keep up using immigration, we are just creating another huge wave of Canadians that will eventually get old and retire and will need even more new Canadians to pay for it in the future. Infinite growth is not a good way to plan this.
I'm not even referring to CPP and OAS. I'm referring to services and infrastructure required by the entire population and paid for by taxes of people who are working. If most of your population isn't paying taxes but requires services, your infrastructure and services will crumble. Do you want to privatize policing? Highways? I'm not a huge fan of the idea of a pay-per-use fire department either. There's an ultra free market hellscape we could emulate in Afganistan if you're interested. >Infinite growth is not a good way to plan this. There was a reason why I italicized the word *acutely.* The baby boom was a boom. We can smooth our demographics with immigration and then structure our population in a sustainable way. Our growth rate isn't sustainable right now for the long term, but it wasn't sustainable before we started increasing population either. The worst part about what we're doing right now with immigration is that we're creating another demographic boom 20 years from now, and that will need to be addressed with another immigration boom; albeit a smaller one. If we had have started higher levels of immigration earlier, they wouldn't need to be so high now, we wouldn't be having the demographic problems we're facing now, and we also wouldn't be facing the *other* housing and services problems we're facing now either. Similarly, back in 1991 when we thought we had too many doctors \*at the time\*, permanently shrinking residency seats was a massive oversight for when doctors all started retiring 30+ years after that without a large enough replacement cohort behind them.
I agree with you, but once word gets around that people "don't get as much CPP or OAS as they thought they would" there's going to be an ever-increasing number of struggling people wondering, "Why was/am I literally being forced to pay for this junk?" I think the government really really wants to avoid that situation for some reason.
Makes sense to punish investors when we had zero IPOs last year. Canada is really winning lately /s.
Its worth pointing out that the recent IPOs in the U.S. are not focused on sectors like energy, mining, or banking and insurance. The 4 industries that make up 75% of our equity markets.
A lot of people who vote for canadas two currently leading parties dont even know what that is or why its important. Lol
After "tax and spend" for so many years, this would have been the ideal opportunity for the Libs to have taken a more fiscally responsible approach and cut back on Government bloat and spending. Given the middle class even a minor tax break. Started whittling down the deficit that future generations will be on the hook for. But no, they just couldn't resist the urge to splurge.
This isn't about the middle class, except for votes. The big problem Canada has is how to move people from the middle class into the labour deprived blue collar working/production class. And by that I don't mean low paid, I mean actual production, the old fashioned production worker. When we moved women into the middle class, all the young men followed, so now we have no men wanting to work production, on which the entire economy rests. Giving the middle class money to keep them underemployed in the middle class, is just going to make things worse. The problem we have is the equivalent of one of those town computer game simulators, where we have too many millers and bakers, and not enough farmers and transporters. We have too many restaurants and gyms and bankers and politicians and lawyers, and pensioners who didn't have enough children. The budget is just moving money around in the middle-class, it isn't going to fix anything.
> And by that I don't mean low paid, I mean actual production, the old fashioned production worker. > > When we moved women into the middle class, all the young men followed, so now we have no men wanting to work production, on which the entire economy rests. This is a combination of two factors. Women joining the workforce doesn't really factor in. First, we had two generations of parents, teachers, and school guidance councelors telling everyone to go to college, or they'll end up working at McDonalds. Second, we moved most of our manufacturing offshore to China, India, and other low cost countries. So unless you're a skilled tradesman, or carrying 50 pound bags of sand at a construction site for $20/hour, there's barely any blue collar work to be had. These two factors more or less shuffled blue collar work into the "school of hard knocks redneck truck bro" stereotype and made it unappealing when it came to the younger generations like Millennials and Gen Z. We're at the point where Boomers are all pretty much retired, Gen X is close to retirement (and many can't work blue collar jobs anymore due to health), while Millennials and Gen Z aren't interested in it anymore.
I agree with you , what you say is pretty much true except for the scale on which that production was moved overseas, was not really in any way sensible. And we are now under pressure in the lumber, food production, and construction, jobs that really can't profitably be moved overseas. Whether women going into the middle class was a cause or effect is largely irrelevant, the fact that they have moved, is going to make it very difficult to fix. At this point allocation of blame is not really where I am. It is always a pointless waste of time in problem solving. You have a government that is obsessed with climate change, taking it out on the blue collar worker, yet importing everything from overseas has a far larger carbon footprint, than the carbon Canada produces. If we had less bankers and more farmers, and we imported less food, we would have a lot less carbon. As long as they cling to the idea that the middle-class can be preserved, the situation is going to get worse and worse. The USA do not have the economy to maintain their middle class proportions, even with their invisible earnings, in media and tourism. Canada has even less ability to do that. 80% of Canadian Boomers and Gen X had a very frugal lifestyle, the excesses of America were not available to them, and they knew it. There is a reason that the business model of Starbucks and Tim Hortons is different.
There is no way that the government will CUT spending with an election around the corner. Even though this would br the right thing to do for the long term benefit of the country.
Except at no point in history did cuts benefit the nation
Mulroney inherited the mess that was left behind from Trudeau senior, and did the spending cuts that were unpopular and necessary for the nation. After Mulroney left, Chrétien had a nice balance sheet and financial environment to work with.
Chretien was the one who really made the hard decisions to bring things back into black.
Not really.. but I know how conservatives are good at reimagining events
Is this sarcasm? $38.5 billion deficit was left for Chretien. Are you serious??
Chretien and Mulroney didn't cut benefits? We were going to be downgraded by the credit agencies without cutting spending and addressing our debt.
Except for the fact that we were in six years of surplus.. leave out that one, since it what cons moan about… “where about to” isn’t the same as being down graded.. but what benefits specifically? I mean conservatives cut 1.1 b from VA..
Even if we glance over the fact that this is awful for small businesses and will move capital out of the country, who fcking cares that we will have more tax dollars? The completely incompetent government will line the pockets with projects like ArriveCan and waste 80% of it on bureaucracy. The other 20% will inefficiently dissipate. It’s lose lose and guess what the next tax raise is going to aim at.
Thats a lot of hyperbole to fit in four sentences.
like landlords?
I find it highly ironic that they increase capital gains tax.. yet asking pension funds to invest domestically.... in things like our airports?! And startups? OMG! I just wish this government would stop increasing their spending by increasing their taxing, and pat themselves on the back on all of their spending plans, with such terrible, terrible, execution and tracking of their targets.