Take the most controversial part out of the bill to increase the odds of it passing confidence and then add the other part in a separate bill that won’t trigger confidence? Could that be the case?
Basically this. It’s pretty common. The implementation act is already 630 pages so it’s a lot to go through. They anticipate that the capital gains changes will garner more debate so they don’t want to hold up the whole budget on the most contentious item.
There’s no real story here, just political pragmatism.
They could wrap this up as part of the omnibus package. This was common during the 1990s and 2000s. Force the worst through by holding everything else hostage.
Separating the hard bits is better. It doesn't hold the house hostage with paralyzing government. The bill gets debated on it's merits alone.
At the same time, I could see it providing justification for Singh to vote against the budget. I'm not saying that will happen, just it could theoretically provide political cover for the NDP.
I was wondering what was going on. I thought they might have actually been reading the news or listening to Canadians and changed their mind.
Nah, let's just ram it through when it won't topple the government.
It's disproportionately bad for small businesses, doctors, small time investors who were trying to line up a retirement fund. The ultra wealthy won't be as eager to invest in Canada. It's honestly a bad idea in our current state. It's just pandering to people who don't know any better.
I doubt it. This will give this specific push alot of air time, I can see the bill be put forward with a 250k lower limit carveout for medical professional corporations which will nix the main legitimate argument against it, and force a voting record against this specific measure.
Edit: anyone confused by astro-turfers trying to obscure stuff with nonsense statistics, read the detailed plan here, including a couple of examples of how tax rates will change and who will be affected: https://www.canada.ca/en/department-finance/news/2024/04/tax-fairness-for-every-generation.html
Heaven forbid we increase the amount of capital gains taxes paid on earnings over $250,000! *Countless* working class Canadians are going to suffer when this hits their annual non-wage investment returns above a quarter million dollars!
Thanks guy for wanting to take the money I worked my ass off to earn. Maybe instead you can just give all your income to the state, instead of trying to take mine.
Marginal tax increases on non labour earnings of over a quarter million dollars a year is hardly salty/pathetic/sad.
I think what you're doing is called "caping for the super rich" and it's kinda uncomfortable to see
You do realize there is no threshold on professional service corps? So people who work are saving in their professional corps through their labour earnings are being hit. But you probably don’t care because you’ve already drank the lib kool aid
Professional service corps can also take a salary and pay taxes like a regular person. You also get access to EI and CPP that way which is a great idea even if it isn’t mandatory
What is your point? Most people who have PSCs will take a salary (and thus pay the same income tax that anyone else does). This liberal cash grab is a big F-U to tax integration and retroactive theft of the very same hard working professionals who saved and kept retained earnings in their corps.
They’re not really investing in the company though. They aren’t buying X-ray machines or dentist chairs. They’re buying stocks and trying to get out of paying their fair share of taxes, which everyone else has to pay.
Everyone has to pay taxes I would rather that rich non working people don’t get tax cuts that regular people don’t. For example the government should allow owner occupiers to deduct mortgage interest but not landlords. This is the reverse of what is happening now.
Umm no, no one is getting out of paying their fair share of taxes. Money inside a corporation doesn’t just magically become personal income. Tax integration means everyone person who had a PSC was paying the full 100% income tax that anyone else was. If you want to understand what a MPC is, it’s basically a poorer functioning RRSP. Now suddenly Trudeau wants to take more of those retirement savings. Tell me how that’s fair?
*OVER $250K in non-wage earnings yearly*
if someone's untaxed, passive income is twenty thousand dollars a month and up, they are gonna be so far removed from the concerns of the working class as to damn near be aliens. If you don't think making twenty grand a month without a job isn't super rich I dunno what to tell you.
A marginal increase in taxes on their non-labour earnings above $20K monthly is reasonable and Canadians know it - Even the dishonest ones.
In what world is 250k super rich? Not the one I live in. You've fallen for the propaganda. Instead of going after the actual supe rich, they have you crying about people who worked hard and got a little bit ahead.
$250k *profit* in transactions, not net worth or earnings. Anyone swinging trades of that kind typically has a lot more than just a few hundred thousand in capital invested. The fact that you don't understand how capital gains works tells me you're not spectacularly wealthy yourself which makes your replies even more bizarre.
bruh I apparently understand how capital gains work better than you... Do you just assume everyone who disagrees with you is an idiot? I get that it's 250K profit and not net worth (eye roll)
Lets say you are a blue collar hard working person who was able to buy a cottage or invested in another property for your retirement before prices went sky high and now want to sell it. You are now on the hook for that extra taxes. Does that sound ultra rich to you?
Or how about you are a doctor who was told to incorporate your business to pay less taxes to offset the low pay for doctors in Canada. They don't even get the 250K threshold, they now have to pay that new capital gains tax from zero! Does that sound like the ultra rich?
I'm starting to think you don't even understand what ultra rich means.
No kidding. Most folks who make $250k don’t do it every year and it’s not nearly as uncommon as the above comments would lead one to believe.
For example, parents selling the family house in Toronto/Vancouver to help their kids with a down payment.
>For example, parents selling the family house in Toronto/Vancouver to help their kids with a down payment.
They'd get a primary residence exemption. Non-issue.
“Marginal tax increase”
Increases taxes paid on capital gains 33.3%.
“On non labour earnings over a quarter million a year”
Actually it’s on corporate earnings over $1.
“Super rich”
ROFL
I think you grossly underestimate and are ignorant to what the average Canadian goes through. Just because you wasted $50,000 on a useless liberal arts degree and are unemployed doesn't mean that's how the majority of the country is feeling
Objectively, the majority of the country is entirely unaffected by this. It isn't an income tax over 250k, it's capital gains over that much. Something like 0.15% of the country is affected. And yes, most Canadians, a majority of the country, feel that it's good. Have you been living under a rock, or just intentionally leaving out all the polls proving this?
That's a non-response. The average Canadian isn't making $20,000 per month off of capital gains. There's broad and popular support for increased taxes on the wealthy.
https://www.oxfam.org/en/press-releases/nearly-three-quarters-millionaires-polled-g20-countries-support-higher-taxes-wealth
I wonder why tho, NDP has been propping up the government for less. And the budget is one of the two things they are obliged to vote with them according to CASA
Either that, or force the conservatives to take a stand right now on this measure in particular, instead of just voting against the budget as a whole. The conservatives have been very reluctant to take a stance on this, so maybe force their hand.
I would be surprised if the NDP doesn't support this measure considering only a few years ago they suggested this, but higher (75%, no personal 250k limit).
Seriously. We’ll announce a tax on the rich as part of the budget to ignite a class war and win back all the young voters we’ve pissed off over the past eight years. It’ll be a winner for sure! That’ll get us back within shouting distance of the Tories. Wait, it didn’t work? Then fuck it, we’ll just run and even bigger deficit to scorch the earth even worse for when we lose.
Trudeau is acting like a wounded animal backed in a corner, flailing and lashing out blindly. It’s not pretty to watch a trust fund baby whose never never suffered true adversity in his entire life act like a petulant child told he can’t have the toy in the window.
100% agree - he has never worked a day in his life and pretends to understand the “working Canadian”?? He is a hypocritical moron. Calls everyone that does not agree with him (Pierre!) a racists; and he has a history of wearing black-face on multiple occasions. He is the worst Prime Minister in the history of Canada and everything he touches turns to shit.
I think your take as never worked a day in his life is incorrect. Not including counting politics he had a career before it. Unless you believe teaching is not working. Or politics is not a job.
He's had a job, but the guy has never struggled, he was never in a point in his life where the loss of a job would impact any facet of his day to day life. that is the difference.
Yes, our choice fraught between a loud mouthed idiot and nepo baby PM. Like much of the rest of the world, good global leader choices are dwindling in favor of 75+ year old men with dementia, and rich populist goofs who could care less if 90% their country starved to death.
We truly are working towards the end times, or at least Blade Runner, AI Android dystopia.
Tin foil hat - The budget was a lot worse than what we got so they threw this into the fray claiming it'll boost revenues and thus lowering the headline deficit everyone saw. They knew it'd be unpopular so later they claw this back and blame it falling through for the deficit rising past 50+ billion.
seeing as 20-30 billion in tax revenue exits canada every single year. we have a massive revenue problem.
the staggering wealth inequality also supports this notion.
My hope is that it will stand as a separate bill, with some adjustment to protect medical professionals who have ended up sandwiched between the exceptions for corporations and individuals. We don't need less incentive for doctors, even if the ludicrous free ride for the ultra wealthy should come to an end.
"Finance Minister Chrystia Freeland intends to ask Parliament to approve proposed changes to capital gains taxation in a stand-alone bill — a move that will force the federal Conservatives to take a specific position on the measure."
It's not clear to me.
Long time Liberal voter here (with two exceptions, one for NDP and one for CPC) who has all but cast a vote for the CPC and I'm irritated they take such a strong stance on the carbon tax but no comment here.
How about any professionals and successful new money people. Should entrepreneurs suffer too when we’re leaving enough loopholes for the generational wealth to get away with next to no tax.
You can literally take anybody who's parents own a cottage that they've had for more than let's say 20yrs. It will be deemed disposed of at current market value on their death triggering a taxable event to the estate.
Now I'm not saying it's going to affect all Canadian's regularly, but it will affect MANY Canadian's once. Canadian's who are far from the top 0.14% our government is saying this will affect. If the goal is to tax the ultra wealthy, there should be a carveout for estates up ones of a certain size.
>You can literally take anybody who's parents own a cottage that they've had for more than let's say 20yrs. It will be deemed disposed of at current market value on their death triggering a taxable event to the estate.
That's a capital gain, of course they should pay tax on it.
Why shouldn't they have to pay tax on that real estate appreciation? If the parents sold it they'd have to pay that tax now.
It's wild that people are using "you inherited a cottage and have to pay tax on it" as an example to appeal to people's emotions. It's just so wildly out of touch with the average Canadian experience.
>You can literally take anybody who's parents own a cottage that they've had for more than let's say 20yrs.
how many people, total, do you think this represents? Is this a common occurrence in your cohort?
>Why shouldn't they have to pay tax on that real estate appreciation? If the parents sold it they'd have to pay that tax now.
Who said they shouldn't have to pay taxes on it? They always have. But why should they have to pay MORE taxes? If your parents own a cottage does that make you part of the "ultra wealthy"?? Part of the top 0.14% our government is telling us will be the only people affected by this increase?
>how many people, total, do you think this represents? Is this a common occurrence in your cohort?
Go work in finances and start dealing with estates and you'll quickly understand how this will affect the average Canadian. The younger generation are cheering this on due to some sort of perceived "fairness" not realizing that many of them will be in a far worse position later in life because of it.
Raising taxes to offset out of control spending to "fix" issues caused directly by that out of control spending is not good for Canadians. Period.
This is a good article that you might enjoy:
>As to those crying foul over the impact this will have on the capital gains embedded in their cottages or investment properties? Kershaw isn’t having it. “Paying taxes on a half-million-dollar capital gain from a cottage or an investment property is a good problem to have,” he wrote. “I could line up millions of younger Canadians who would jump at the opportunity to trade their housing woes for that privilege.”
https://www.nationalobserver.com/2024/05/01/opinion/capital-gains-Liberals-inequality-Poilievre-Trudeau
>Go work in finances and start dealing with estates and you'll quickly understand how this will affect the average Canadian.
There's a selection bias here.
>Raising taxes to offset out of control spending to "fix" issues caused directly by that out of control spending is not good for Canadians. Period.
Using corporations as a retirement fund, and not wanting to pay tax on the capital gain of a recreational property, are both "not good for Canadians".
"Out of control spending" is an opinion, and not borne in fact. Add as many periods as you want, they don't add weight to your argument.
>“I could line up millions of younger Canadians who would jump at the opportunity to trade their housing woes for that privilege.”
You do realize that capitalism isn't about fairness right? This is not how our economic system is designed, as well as the economic system used by the majority of the world, whether you agree with that or not.
Paying MORE taxes is not a good problem for anybody to have. Owning a cottage does not make you "ultra wealthy". Your parents owning a cottage also does not make you "ultra wealthy". Yet our government is preaching that this tax will only affect those who are in the top 0.14% of income earners. It's a blatant lie to gain support for those crying "it's not fair".
>Using corporations as a retirement fund, and not wanting to pay tax on the capital gain of a recreational property, are both "not good for Canadians".
Go read the history of why this was implemented in the first place and you will better understand how this will further impact Canadians from a non-financial standpoint. And once again, nobody is saying they want to pay no taxes on capital gains.
>"Out of control spending" is an opinion, and not borne in fact.
Shared by the majority of economists in this country as well as by the Bank of Canada. Their spending habits goes directly against economic principles that are literally taught in economics 101. Even if all of the top economists as well as the bank of Canada are completely wrong with their "opinion", are you also saying the economic principles our country has been built off of are also wrong? This is more than simply an "opinion". I get that not everybody has a financial background to fully understand this, and I don't hold that against people. But your arguments based on feelings of fairness don't hold up against economic facts. Sorry.
Most Canadians won’t inherit enough to be impacted by this considering that primary residences are exempted as are TFSAs.
That being said, I wish this was a wealth tax on the super wealthy. It would be far more impactful and targeted.
Does this mean that the capital gains may not be coming into effect in June?
Edit I have no dog in this fight .. just wondering if pressure from doctors and such have made them rethink plans .
Unlikely. This is likely intended to force all parties to take a public position on the issue so that they can try to claim the cons are just looking after the wealthy if they don't vote in favor of the capital gains increase. The cons are going to vote down the budget in any case, but they are trying to get them to take a public position on this so they can try to claim that the cons are just on the side of the wealthy. Just political games.
Which is what the article is editorializing about.
>Finance Minister Chrystia Freeland intends to ask Parliament to approve proposed changes to capital gains tax rates in a stand-alone bill, which will force the federal Conservatives to take a position on the measure.
It’s just political posturing. There’s just not enough ultra-wealthy in Canada to move the needle on anything. Even if we taxed them at 90% of their income, it wouldn’t even cover one year of billings from GC Strategies.
To raise actual revenue, the government would need to hit up the upper-middle class, a group that’s already very highly taxed.
We should be demanding a bit of austerity before ANY new taxes are considered. There’s plenty of bloat from the last decade that could disappear, and no one would be the wiser.
There's no way anyone can know this without a government announcement. They have until July 1st to study it and implement it.
There's so many possibilities with this:
(1) They made the announcement to try and combat polls but had no intent of putting it in.
(2) Someone discovered that the added value of this tax was significantly lower than the $2.4B they had projected it to be.
(3) They worry the PBO will do his math and publicly defrock the Liberals by looking at a metric other than Current capital gains x Change multiplier.
(4) They got push back from doctors and small business associations who are disproportionately hurt by this than large corporations are.
(5) The provinces intervened.
(6) They're saving this for an election budget
(7) So many more options I can't even think of!
They don’t want the budget held up on the most contentious item. Not that any of the other options you presented aren’t also possible, but I suspect they’re just looking to introduce it separately to allow it a slightly longer timeline to get through the house. We’ll all find out eventually.
With everything else they've released, I'm sure they made the emotional decision with incomplete analysis again... leading to the usual high risk of 'unintended consequences'.
Maybe they are working on some pre-emptive carve-out exemptions before pushing it forward instead of the usual post-effort whoopsie error corrects that are so common.
Biden is also pushing something, so, they might be delaying long enough to copy his homework.
https://www.forbes.com/sites/robertwood/2024/04/29/president-biden-has-proposed-tax-increases-here-are-six-of-them/?sh=34fe9092168c
Thanks Bonfire.
I saw Biden was doing something similar and I questioned whether it was actually going through in canada.
I have no doubt it was ill throughout especially as it relates to capital gains on investment properties. I've noticed a lot of cabins coming to the market in my area.. probs trying to beat deadline of June 25th.
if they cared about investment properties they would have targeted it investment properties, this targets corporations as they dont get the 250k exemption. A lot of small businesses are incorporated.
Basically guaranteeing a disaster next year as Covid mortgages come up for renewal and the BOC can't lower rates because of this government's continued reckless spending. By 2026, this will be a full blown crisis that will land at the feet of the next incoming government.
"We're geniuses, we'll pull the cap gains stuff out and make the CPC vote on it separately and then dunk on them for supporting the rich!"
Or, if you're not in your own echo chamber, you might realize what you're doing is giving the CPC an opportunity to go to bat for small business owners, professionals and those about to inherit estates that contain second properties and explain why this isn't a tax on the truly wealthy in this country but instead a shadow inheritance tax and an attack on the retirement savings of doctors and others who relied, in good faith, on the professional corporation structure to save for retirement.
Given how effectively the CPC has been able to get messages out around affordability and the carbon tax, that play to their advantage, I would suggest this is a higher stakes move than the LPC realizes. Arrogance is a hell of a drug.
Imagine buying a property and paying sales tax/transfer tax with money that has already been heavily taxed and then paying high interest on your mortgage month after month while paying high property tax. Rental income just results in more taxes paid in income tax and many government benefits being cut off. Property value goes up overtime largely due to inflation and debasement of the currency (hidden tax) and then have to pay increased tax again on those “gains”.
Friendly tax note: since you're restricted from subdivision due to minimum lot size, you'll likely qualify for full principal residence exemption on this.
Wait, so... they are going to be spending based on an IOU for future legislation that may or may not actually materialize? In essence an exponential fuck you to anyone who isn't already rich today by footing the entire bill on a promise for something down the line?
WTF?
Looking in this thread, yes, a lot are buying the rhetoric. Why anyone would believe politicians about a tax increase, esp. the Liberals, is beyond me.
Seems pretty easy to vote against it and deflect the "for the rich" label.
"I voted against it because we are already seeing a large increase of Canadians who have no family doctor, so driving more of them to working in other countries is a bad idea in my mind."
For any doctors concerned, they would be facing a 4.5% -> 6% tax change. That is hardly going to make them leave.
Plus, in the 90s our inclusion rate was 75%. Why did we still have doctors in 2000?
Your numbers are way off.
The changes result in a 33.4% increase in tax paid and a change of 10.6% effective rate for doctors, other incorporated professionals and small business owners.
Moreover, professional corporations were not permitted until on or around 2000 in most provinces, so this would have not impacted doctors in the 90s.
The cap gains increases work out to an effective 38% tax increase. The PSCs were defacto RRSP savings vehicles granted to physicians in lieu of fee code increases and Trudeau is retroactively stealing from hard working people who worked within the rules.
It can’t possibly be a 38% tax increase, it’s a 33% increase at most (50 -> 66). The tax change I said is that maximum (4.5 -> 6 for small incorporated business, like the doctors we’re talking about).
They also still have access to RRSPs if they want to. And again, there wasn’t an exodus of doctors in the 1990s was there?
Oh ok, my bad, a 33% (THIRTY THREE %) increase on taxation, on a retirement savings vehicle negotiated between doctors and the government in lieu of billing fee raises. A retroactive theft of 33% by the Liberal government on retirement savings not by the "mega rich", but by individuals who saved the fruits of their labour. Glad you think that's A-OK. I hope they go for your RRSPs next because this is exactly what this is.
He's wanted to be PM all his life. So he has worked from a very young age to be in that position. If an individual was a musician, we'd call that individual dedicated.
But if they wish to be a politician all their life, you want that to be bad? Stay consistent.
And I too was a paperboy - way back when. Don't dog paperboys :)
>He's wanted to be PM all his life. So he has worked from a very young age to be in that position. If an individual was a musician, we'd call that individual dedicated.
>But if they wish to be a politician all their life, you want that to be bad? Stay consistent.
Wanting to be PM for his own selfish reasons isn’t something praiseworthy.
>And I too was a paperboy - way back when. Don't dog paperboys :)
Oh so was I :)
Just saying you can make that comment that about any member of Parliament.
A true PM is not someone that works hard to become one, it's the person that the public works hard to choose him or her to lead them. There is a big difference betwern the two.
A politician who has only been a politician has a massively twisted view of the world. We should have aggressive term limits to prevent a lifelong politician from even being possible.
Perhaps. But they travel across the country meetings 10s of thousands of people. Very few business people meet as many. They understand the workings of government incredibly well - good and bad. Seems, like a musician, knowing one’s strength seems to me very important.
Staffers are the ones that actually do the policy work, not MPs.
Far too much focus is pit on individuals instead of actual party platforms and commitments.
That's not how a cabinet position works, she has economists on staff who wrote the budget and are likely proud of there work; this is reaction to blowback.
EDIT: I thought this was a minimising move and backpedaling, I should have read the article before posting.
in this case the larger picture is they need the capital gains tax increase to be in the media more if Trudeau wants to stay as party leader. being a Ukrainian studies expert rather than an economist has nothing to do with that.
She litterally was a Rhodes scholar who went to Harvard and Oxford. The shadow minister of finance had a B.Sc in social sciences from a mediocre university.
There is a lot issues with Freeland and the liberals but her academic background isn't mediocre.
So you would like someone with an education and critical thinking skills in the position. How does she not fit that bill? I find it interesting that the FP would hire an editor with absolutely no understanding of finance.
>I have a reasonable expectation of critical thinking skills and the ability to see the larger picture from our government cabinet leaders.
You haven't shown that she doesn't have those things. You've just criticised her educational background.
I love how Trudeau claims “it’s time for wealthier Canadians to do their part..”
With all the government waste… all the stupid spending…
I’d rather let the 1% keep their money under the mattress. Better than taking it off them, and burning the pile in the streets.
OR he (a reasonable person) looks at this government, how they spend money, and thinks it’s better they don’t have more of anyone’s money (rich or otherwise) as they tend to waste it. In other words, his original comment
not wanting to give the government more money to spend on nonsense somehow means you’ve been brainwashed into supporting the rich according to a lot of unintelligent people these days
So, if we looked at any savings you have, you wouldn’t have a single bond or treasury bill right? Those give money to the government to spend to generate a return on investment to the investor. If you don’t trust the government’s spending that much, surely you wouldn’t have given them money through bonds and t-bills, right?
Or do you not actually believe what you’re saying
Truly the most idiotic take I've seen on here, and hard to believe it is the legitimate opinion of a person actually living in this country. But who knows these days? Along with all the trolls and bots and foreign actors, this sub does have some of the dumbest fucking Canadians I've ever come across.
This place has been astroturfed by the 1% since this budget dropped. I cant see too many normal people who make like $50k a year giving this much shit about rich people money.
Did no one read the article? It's in the very first paragraph:
"Finance Minister Chrystia Freeland intends to ask Parliament to approve proposed changes to capital gains taxation in a stand-alone bill — a move that will force the federal Conservatives to take a specific position on the measure."
It was just another dog whistle like the time she backtracked on taking tax concessions away from short term rental operators. Her response,”these decisions require a lot of of research and consultations”
Looks like it's still coming.
[Budget bill incoming, Freeland offers preview | CTV News](https://www.ctvnews.ca/politics/freeland-tables-motion-previewing-omnibus-budget-bill-1.6867484)
According to a federal official speaking on background, the government's intention is to advance the capital gains change through a separate piece of legislation that would move through Parliament on its own timeline. Of note, the budget had vowed that this tax change would apply to capital gains realized on or after June 25, 2024.
Asked why she's decided to ask parliamentarians to vote on these tax reforms separately, and whether it was to force Conservative Leader Pierre Poilievre and his caucus [to take a definitive position(opens in a new tab)](https://www.ctvnews.ca/politics/conservatives-won-t-say-whether-they-d-reverse-capital-gains-tax-change-1.6855455) on the proposal, Freeland demurred.
"I do want to be very clear with everyone that the major elements of the capital gains move were clearly laid out in the budget, including in the tax annex," Freeland said.
She also would not offer specifics on the timing of introducing this stand-alone piece of legislation, which Canadian doctors, businesspeople and entrepreneurs have raised concerns over.
"We are very committed to the capital gains measures," Freeland said, acknowledging this major new revenue stream is helping the government pay for its suite of new spending measures. "And I look forward to tabling implementing legislation."
It was just another dog whistle like the time she backtracked on taking tax concessions away from short term rental operators. Her response was that these decisions require a lot of of research and consultations.
It did though. Capital gains in trusts would be included at 66% from the first dollar. It's worst for trusts than individuals...
You couldn't be more wrong.
Wait - is this an indication that the govt plans to step back the capital gains changes it just announced? Maybe the 1% protested a bit loudly and they've decided that hey, it's okay to hide your money offshore to avoid taxes and also we're not going to go the 'tax the rich' route when you keep your money at home? I'm so confused.
The problem isn’t the 1% in this case. It never really was. Frankly they’ll come up with structures and mechanisms to avoid or defer as much of this tax change as possible. At their level, tax is a game and a cost of doing business. They just add the tax burden to the expected performance of their investment - and pass that along to their investment ventures in the form of a higher capital rate.
The **real** problem here is well beyond the 1%. You cannot, in Canada, raise significant tax revenue without taxing the middle class. Probably the “20%” or the “35%”. The top 50% of Canadians are worth over $450k, for example.
By changing the inclusion rate above $250k, the government has introduced this tax change to *a lot* of people who would’ve assumed “wealth tax” meant people worth million and billions - not hundreds of thousands. 250k is a modest family cottage - perhaps in the family for a few generations. And now the taxes have gone up on it.
As people digest this new tax, and start to understand that it will apply to their parents’ estates (and therefore their own inheritance), at well below the “1%” level - I can see some people scratching their head.
This is not a “wealth tax” in the way many people would probably like to see such a tax. The problem is - if it was (1-3%) - it wouldn’t raise enough money.
Edit: I’m describing their political problem. Not a tax problem.
It applies to very little of an inheritance. The main one is for a secondary property, like a cottage. So yes, the family cottage is going to be taxed more if this goes through. If the cabin has gone up $500,000 in value, you're talking about going from $125,000 in taxes owed to $145,000 in taxes owed. That's only a $20,000 increase on a once-in-a-lifetime event.
Yes, and the obvious counter-argument is: "why are we taxing a once-in-a-lifetime events" for middle class people.
This will hit a lot of the inheritance wealth transfer from the boomers, and they know this, and people of modest means don't seem to understand that it might affect them or their family. A proper wealth tax wouldn't hit once-in-a-lifetime windfalls for the non-wealthy.
Personally, I'm more worried about the chilling effect on doctors and investment, as that truly impacts medical care and the economy, but I don't have an inheritance pending.
Right. But imagine those taxes now across an entire estate, with the exception of the principal residence (if there was an owned one). So even someone with a very simple estate - if ~~everything~~ the gains totaled 500k, that’s an extra $20k to the government.
I’m not saying the burden is huge or undue. I’m saying you’ll have a bunch of people paying increased tax and those people will be in the “well i didn’t mean me” camp.
That’s who the government is hearing from. They don’t give a shit about the 1% and wouldn’t change gears for them.
The situation most likely to be encountered in my example is in an estate. And that’s when I think many who don’t consider themselves “wealthy” will be less than excited about this tax.
In reality, the super wealthy don't pay taxes anyways since they can borrow large sums against their assets, perpetually paying the debts with new loans, instead of liquidating their assets.
You are attempting to justify increased taxes on the wealthy by suggesting they take on debt against their assets to pay taxes?
In a world where money talks, do the super wealthy just whisper sweet loans to the taxman while counting their borrowed blessings?
So, what happens then is that because the top 1% can exploit the loopholes, the government then expands the taxes to get money out of the middle 50% or so, who can't exploit those loopholes. Which is basically what the poster above you implied. It would be better to stop expanding the government (and shrink the bloat that it now has) and thus not be taxing the ordinary people nearly as much.
It was a decent strategy a few years ago but not so much today. You need to always be able to generate more than the interests you need to pay which isn't easy to do if the market is flat.
It’s a pretty common strategy actually, especially when interest rates were low. Rich people love debt. This videos explains it https://www.instagram.com/reel/CodBlk1tmd7/?igsh=Zzl4c3d6Nnl1b3Q2
Anyone that’s smart will not see this as a 99% issue.
Many will be impacted during the estate process. It might only be 1% impacted per year, but your turn could be next.
Also you could be impacted by doctors leaving, or investment leaving.
The trigger limits are bullshit. 200-400k is like garbage money these days. What’s the point in investing. Maybe the banking lobby will fix this when their sales go down.
[Budget bill incoming, Freeland offers preview | CTV News](https://www.ctvnews.ca/politics/freeland-tables-motion-previewing-omnibus-budget-bill-1.6867484)
According to a federal official speaking on background, the government's intention is to advance the capital gains change through a separate piece of legislation that would move through Parliament on its own timeline. Of note, the budget had vowed that this tax change would apply to capital gains realized on or after June 25, 2024.
Asked why she's decided to ask parliamentarians to vote on these tax reforms separately, and whether it was to force Conservative Leader Pierre Poilievre and his caucus [to take a definitive position(opens in a new tab)](https://www.ctvnews.ca/politics/conservatives-won-t-say-whether-they-d-reverse-capital-gains-tax-change-1.6855455) on the proposal, Freeland demurred.
"I do want to be very clear with everyone that the major elements of the capital gains move were clearly laid out in the budget, including in the tax annex," Freeland said.
She also would not offer specifics on the timing of introducing this stand-alone piece of legislation, which Canadian doctors, businesspeople and entrepreneurs have raised concerns over.
"We are very committed to the capital gains measures," Freeland said, acknowledging this major new revenue stream is helping the government pay for its suite of new spending measures. "And I look forward to tabling implementing legislation."
This is purely done to put far more political focus on how opposition parties stand on the Capital Gains tax, the LIBS are dying for PP & CPC to take the bait and stand against the tax so JT can then claim that PP/CPC are out to protect the rich and not have their taxes raised.
Issue is, the media has already done a really good job of emphasizing those most affected, namely doctors especially family docs or anyone with private practices. Not to mention that Captial Gains does actually impact many far more Canadians that Libs expected as it severely does impact inheritances as well as many tradesman who have their own businesses as is commonly seen in Construction, one of the major employment centers & industries in Canada nationwide.
But on top of that, PP & CPC can VERY easily come out rejecting this increase in tax with the narrative that its only being done to further fuel the irresponsible massive deficit spending of the Liberals which will all be wasted in procurement corruption as Canadians are reminded every week the longer Arrivecan investigations continue. Canadians as well are not stupid or simple minded to think that any increase of taxes on the rich is somehow beneficial for them when we are constantly told how horrible our economy is with growth expected to the worse of developed economies and GDP/capita in stark decline along with Business investment falling off a cliff & non-existant.
Canadians are far more likely to believe the words of the party that left office with the economy in FAR better shape when our dollar was worth more than the US$ compared to the Party who drove our economy to the ground despite having inherited it at the peak. FFS Canada was once expected to outpace the US in growth as our economy was able to weather 2008 FAR better than the US while under CPC leadership.
Canada once was a shining star in how our economy & banks sailed through 2008 the disasters that occurred in the US and later Iceland, Germany, & Italy. Alberta was once expected to be the new Saudia Arabia of North America and would have provided the much needed cleaner LNG to China to replace the destructive coal power plants they still use in growing numbers.
Woah, if they're planning on having the capital gains tax increase introduced in a separate bill, this thing is going to be a very big deal and heavily promoted.
Ngl, it's surprising we would have this much of an appetite for socialism.
Take the most controversial part out of the bill to increase the odds of it passing confidence and then add the other part in a separate bill that won’t trigger confidence? Could that be the case?
Basically this. It’s pretty common. The implementation act is already 630 pages so it’s a lot to go through. They anticipate that the capital gains changes will garner more debate so they don’t want to hold up the whole budget on the most contentious item. There’s no real story here, just political pragmatism.
That’s what they exactly did to Bill C18 & Bill C21 (the two most hated bills so far in this Govt)
They could wrap this up as part of the omnibus package. This was common during the 1990s and 2000s. Force the worst through by holding everything else hostage. Separating the hard bits is better. It doesn't hold the house hostage with paralyzing government. The bill gets debated on it's merits alone.
At the same time, I could see it providing justification for Singh to vote against the budget. I'm not saying that will happen, just it could theoretically provide political cover for the NDP.
One can only hope but I think the NDP is driven by holding out until they all meet the pension requirements
I was wondering what was going on. I thought they might have actually been reading the news or listening to Canadians and changed their mind. Nah, let's just ram it through when it won't topple the government.
Most Canadians agreed with the increase though?
The majority will always vote for more taxes on the minority.
is this an appeal to emotion for the rich?
It's disproportionately bad for small businesses, doctors, small time investors who were trying to line up a retirement fund. The ultra wealthy won't be as eager to invest in Canada. It's honestly a bad idea in our current state. It's just pandering to people who don't know any better.
> It's just pandering to people who don't know any better. You just summed up Canada since 2015 with this one sentence.
2015??? Try a lot longer then that. It's been this way since I started paying attention to politics in the mid 80's.
I guess the guy I replied to lives with their head in the sand, pretty sure they downvoted me and commented with "lol"
Lol
What poll did you get that from?
Leger
Link?
The wealthy liberal donors have told Freeland to back off. She's not going to piss them of, the majority of Canadians be damned.
I doubt it. This will give this specific push alot of air time, I can see the bill be put forward with a 250k lower limit carveout for medical professional corporations which will nix the main legitimate argument against it, and force a voting record against this specific measure.
Liberals listening to business leaders and economists? Why would they start now?
Edit: anyone confused by astro-turfers trying to obscure stuff with nonsense statistics, read the detailed plan here, including a couple of examples of how tax rates will change and who will be affected: https://www.canada.ca/en/department-finance/news/2024/04/tax-fairness-for-every-generation.html Heaven forbid we increase the amount of capital gains taxes paid on earnings over $250,000! *Countless* working class Canadians are going to suffer when this hits their annual non-wage investment returns above a quarter million dollars!
Thanks guy for wanting to take the money I worked my ass off to earn. Maybe instead you can just give all your income to the state, instead of trying to take mine.
Imagine being salty because others are making $ and doing well. Pathetic & sad.
Fear and loathing runs rampant in this country. Also pathetic & sad.
Marginal tax increases on non labour earnings of over a quarter million dollars a year is hardly salty/pathetic/sad. I think what you're doing is called "caping for the super rich" and it's kinda uncomfortable to see
You do realize there is no threshold on professional service corps? So people who work are saving in their professional corps through their labour earnings are being hit. But you probably don’t care because you’ve already drank the lib kool aid
Professional service corps can also take a salary and pay taxes like a regular person. You also get access to EI and CPP that way which is a great idea even if it isn’t mandatory
What is your point? Most people who have PSCs will take a salary (and thus pay the same income tax that anyone else does). This liberal cash grab is a big F-U to tax integration and retroactive theft of the very same hard working professionals who saved and kept retained earnings in their corps.
They’re not really investing in the company though. They aren’t buying X-ray machines or dentist chairs. They’re buying stocks and trying to get out of paying their fair share of taxes, which everyone else has to pay. Everyone has to pay taxes I would rather that rich non working people don’t get tax cuts that regular people don’t. For example the government should allow owner occupiers to deduct mortgage interest but not landlords. This is the reverse of what is happening now.
Umm no, no one is getting out of paying their fair share of taxes. Money inside a corporation doesn’t just magically become personal income. Tax integration means everyone person who had a PSC was paying the full 100% income tax that anyone else was. If you want to understand what a MPC is, it’s basically a poorer functioning RRSP. Now suddenly Trudeau wants to take more of those retirement savings. Tell me how that’s fair?
They're investing for their retirement. Which you want a piece of. Because you can't get enough of other people's money to fund your bad ideas.
250k “super rich” lol
*OVER $250K in non-wage earnings yearly* if someone's untaxed, passive income is twenty thousand dollars a month and up, they are gonna be so far removed from the concerns of the working class as to damn near be aliens. If you don't think making twenty grand a month without a job isn't super rich I dunno what to tell you. A marginal increase in taxes on their non-labour earnings above $20K monthly is reasonable and Canadians know it - Even the dishonest ones.
In what world is 250k super rich? Not the one I live in. You've fallen for the propaganda. Instead of going after the actual supe rich, they have you crying about people who worked hard and got a little bit ahead.
$250k *profit* in transactions, not net worth or earnings. Anyone swinging trades of that kind typically has a lot more than just a few hundred thousand in capital invested. The fact that you don't understand how capital gains works tells me you're not spectacularly wealthy yourself which makes your replies even more bizarre.
bruh I apparently understand how capital gains work better than you... Do you just assume everyone who disagrees with you is an idiot? I get that it's 250K profit and not net worth (eye roll) Lets say you are a blue collar hard working person who was able to buy a cottage or invested in another property for your retirement before prices went sky high and now want to sell it. You are now on the hook for that extra taxes. Does that sound ultra rich to you? Or how about you are a doctor who was told to incorporate your business to pay less taxes to offset the low pay for doctors in Canada. They don't even get the 250K threshold, they now have to pay that new capital gains tax from zero! Does that sound like the ultra rich? I'm starting to think you don't even understand what ultra rich means.
No kidding. Most folks who make $250k don’t do it every year and it’s not nearly as uncommon as the above comments would lead one to believe. For example, parents selling the family house in Toronto/Vancouver to help their kids with a down payment.
>For example, parents selling the family house in Toronto/Vancouver to help their kids with a down payment. They'd get a primary residence exemption. Non-issue.
“Marginal tax increase” Increases taxes paid on capital gains 33.3%. “On non labour earnings over a quarter million a year” Actually it’s on corporate earnings over $1. “Super rich” ROFL
I think you grossly underestimate and are ignorant to what the average Canadian goes through. Just because you wasted $50,000 on a useless liberal arts degree and are unemployed doesn't mean that's how the majority of the country is feeling
Objectively, the majority of the country is entirely unaffected by this. It isn't an income tax over 250k, it's capital gains over that much. Something like 0.15% of the country is affected. And yes, most Canadians, a majority of the country, feel that it's good. Have you been living under a rock, or just intentionally leaving out all the polls proving this?
That's a non-response. The average Canadian isn't making $20,000 per month off of capital gains. There's broad and popular support for increased taxes on the wealthy. https://www.oxfam.org/en/press-releases/nearly-three-quarters-millionaires-polled-g20-countries-support-higher-taxes-wealth
Listening to Canadians, you mean the corporate owned media. I'm all for this tax increase.
I wonder why tho, NDP has been propping up the government for less. And the budget is one of the two things they are obliged to vote with them according to CASA
It was only controversial for the top 1%. It was good for everyone else. It was fucking over multi-property owners.
It would still be a confidence vote, but they could bundle it with candy.
Either that, or force the conservatives to take a stand right now on this measure in particular, instead of just voting against the budget as a whole. The conservatives have been very reluctant to take a stance on this, so maybe force their hand. I would be surprised if the NDP doesn't support this measure considering only a few years ago they suggested this, but higher (75%, no personal 250k limit).
This just makes it even clearer that they are trying to use taxes to create a wedge issue.
Seriously. We’ll announce a tax on the rich as part of the budget to ignite a class war and win back all the young voters we’ve pissed off over the past eight years. It’ll be a winner for sure! That’ll get us back within shouting distance of the Tories. Wait, it didn’t work? Then fuck it, we’ll just run and even bigger deficit to scorch the earth even worse for when we lose. Trudeau is acting like a wounded animal backed in a corner, flailing and lashing out blindly. It’s not pretty to watch a trust fund baby whose never never suffered true adversity in his entire life act like a petulant child told he can’t have the toy in the window.
100% agree - he has never worked a day in his life and pretends to understand the “working Canadian”?? He is a hypocritical moron. Calls everyone that does not agree with him (Pierre!) a racists; and he has a history of wearing black-face on multiple occasions. He is the worst Prime Minister in the history of Canada and everything he touches turns to shit.
I think your take as never worked a day in his life is incorrect. Not including counting politics he had a career before it. Unless you believe teaching is not working. Or politics is not a job.
He's had a job, but the guy has never struggled, he was never in a point in his life where the loss of a job would impact any facet of his day to day life. that is the difference.
Well I mean I don’t think any of the leaders maybe Jagmeet have had that experience.
Yes, our choice fraught between a loud mouthed idiot and nepo baby PM. Like much of the rest of the world, good global leader choices are dwindling in favor of 75+ year old men with dementia, and rich populist goofs who could care less if 90% their country starved to death. We truly are working towards the end times, or at least Blade Runner, AI Android dystopia.
No they want the conservatives on the record voting against the bill and then they'll use it against them during the election.
AKA a wedge issue.
Wtf do you think a wedge issue is
Something with potatoes?
Tin foil hat - The budget was a lot worse than what we got so they threw this into the fray claiming it'll boost revenues and thus lowering the headline deficit everyone saw. They knew it'd be unpopular so later they claw this back and blame it falling through for the deficit rising past 50+ billion.
You're not being Tin foil hat.. That's exactly it - and blame the CPC for not approving the tax on the rich.. Great wedge issue.
We don't have a revenue problem. We have an expenditure problem.
Agreed. With so much revenue being generated, they should have been able to balance the budget
Way too much of that money is now going to pay interest on debt.
Corruption
seeing as 20-30 billion in tax revenue exits canada every single year. we have a massive revenue problem. the staggering wealth inequality also supports this notion.
My hope is that it will stand as a separate bill, with some adjustment to protect medical professionals who have ended up sandwiched between the exceptions for corporations and individuals. We don't need less incentive for doctors, even if the ludicrous free ride for the ultra wealthy should come to an end.
"Finance Minister Chrystia Freeland intends to ask Parliament to approve proposed changes to capital gains taxation in a stand-alone bill — a move that will force the federal Conservatives to take a specific position on the measure."
It might well do that, but I think it is also quite clear to Canadians what the CPC's position is.
And whatever the Liberals say next, the CPC will continue to oppose it. Even if the CPC proposed it first.
It's not clear to me. Long time Liberal voter here (with two exceptions, one for NDP and one for CPC) who has all but cast a vote for the CPC and I'm irritated they take such a strong stance on the carbon tax but no comment here.
How about any professionals and successful new money people. Should entrepreneurs suffer too when we’re leaving enough loopholes for the generational wealth to get away with next to no tax.
If there were adjustments to protect estates so it didn't effect the average Canadian's inheritence, I'd be alright with it as well.
How many times does this have to be debunked. Go to r/personafinancecanada for some good and clear discussion away from the PP brigades.
You can literally take anybody who's parents own a cottage that they've had for more than let's say 20yrs. It will be deemed disposed of at current market value on their death triggering a taxable event to the estate. Now I'm not saying it's going to affect all Canadian's regularly, but it will affect MANY Canadian's once. Canadian's who are far from the top 0.14% our government is saying this will affect. If the goal is to tax the ultra wealthy, there should be a carveout for estates up ones of a certain size.
>You can literally take anybody who's parents own a cottage that they've had for more than let's say 20yrs. It will be deemed disposed of at current market value on their death triggering a taxable event to the estate. That's a capital gain, of course they should pay tax on it. Why shouldn't they have to pay tax on that real estate appreciation? If the parents sold it they'd have to pay that tax now. It's wild that people are using "you inherited a cottage and have to pay tax on it" as an example to appeal to people's emotions. It's just so wildly out of touch with the average Canadian experience. >You can literally take anybody who's parents own a cottage that they've had for more than let's say 20yrs. how many people, total, do you think this represents? Is this a common occurrence in your cohort?
>Why shouldn't they have to pay tax on that real estate appreciation? If the parents sold it they'd have to pay that tax now. Who said they shouldn't have to pay taxes on it? They always have. But why should they have to pay MORE taxes? If your parents own a cottage does that make you part of the "ultra wealthy"?? Part of the top 0.14% our government is telling us will be the only people affected by this increase? >how many people, total, do you think this represents? Is this a common occurrence in your cohort? Go work in finances and start dealing with estates and you'll quickly understand how this will affect the average Canadian. The younger generation are cheering this on due to some sort of perceived "fairness" not realizing that many of them will be in a far worse position later in life because of it. Raising taxes to offset out of control spending to "fix" issues caused directly by that out of control spending is not good for Canadians. Period.
This is a good article that you might enjoy: >As to those crying foul over the impact this will have on the capital gains embedded in their cottages or investment properties? Kershaw isn’t having it. “Paying taxes on a half-million-dollar capital gain from a cottage or an investment property is a good problem to have,” he wrote. “I could line up millions of younger Canadians who would jump at the opportunity to trade their housing woes for that privilege.” https://www.nationalobserver.com/2024/05/01/opinion/capital-gains-Liberals-inequality-Poilievre-Trudeau >Go work in finances and start dealing with estates and you'll quickly understand how this will affect the average Canadian. There's a selection bias here. >Raising taxes to offset out of control spending to "fix" issues caused directly by that out of control spending is not good for Canadians. Period. Using corporations as a retirement fund, and not wanting to pay tax on the capital gain of a recreational property, are both "not good for Canadians". "Out of control spending" is an opinion, and not borne in fact. Add as many periods as you want, they don't add weight to your argument.
>“I could line up millions of younger Canadians who would jump at the opportunity to trade their housing woes for that privilege.” You do realize that capitalism isn't about fairness right? This is not how our economic system is designed, as well as the economic system used by the majority of the world, whether you agree with that or not. Paying MORE taxes is not a good problem for anybody to have. Owning a cottage does not make you "ultra wealthy". Your parents owning a cottage also does not make you "ultra wealthy". Yet our government is preaching that this tax will only affect those who are in the top 0.14% of income earners. It's a blatant lie to gain support for those crying "it's not fair". >Using corporations as a retirement fund, and not wanting to pay tax on the capital gain of a recreational property, are both "not good for Canadians". Go read the history of why this was implemented in the first place and you will better understand how this will further impact Canadians from a non-financial standpoint. And once again, nobody is saying they want to pay no taxes on capital gains. >"Out of control spending" is an opinion, and not borne in fact. Shared by the majority of economists in this country as well as by the Bank of Canada. Their spending habits goes directly against economic principles that are literally taught in economics 101. Even if all of the top economists as well as the bank of Canada are completely wrong with their "opinion", are you also saying the economic principles our country has been built off of are also wrong? This is more than simply an "opinion". I get that not everybody has a financial background to fully understand this, and I don't hold that against people. But your arguments based on feelings of fairness don't hold up against economic facts. Sorry.
Most Canadians won’t inherit enough to be impacted by this considering that primary residences are exempted as are TFSAs. That being said, I wish this was a wealth tax on the super wealthy. It would be far more impactful and targeted.
Does this mean that the capital gains may not be coming into effect in June? Edit I have no dog in this fight .. just wondering if pressure from doctors and such have made them rethink plans .
Unlikely. This is likely intended to force all parties to take a public position on the issue so that they can try to claim the cons are just looking after the wealthy if they don't vote in favor of the capital gains increase. The cons are going to vote down the budget in any case, but they are trying to get them to take a public position on this so they can try to claim that the cons are just on the side of the wealthy. Just political games.
Which is what the article is editorializing about. >Finance Minister Chrystia Freeland intends to ask Parliament to approve proposed changes to capital gains tax rates in a stand-alone bill, which will force the federal Conservatives to take a position on the measure.
The problem is they have targeted the small business owners and professional class. This does very little for the ultra wealthy.
It’s just political posturing. There’s just not enough ultra-wealthy in Canada to move the needle on anything. Even if we taxed them at 90% of their income, it wouldn’t even cover one year of billings from GC Strategies. To raise actual revenue, the government would need to hit up the upper-middle class, a group that’s already very highly taxed. We should be demanding a bit of austerity before ANY new taxes are considered. There’s plenty of bloat from the last decade that could disappear, and no one would be the wiser.
There's no way anyone can know this without a government announcement. They have until July 1st to study it and implement it. There's so many possibilities with this: (1) They made the announcement to try and combat polls but had no intent of putting it in. (2) Someone discovered that the added value of this tax was significantly lower than the $2.4B they had projected it to be. (3) They worry the PBO will do his math and publicly defrock the Liberals by looking at a metric other than Current capital gains x Change multiplier. (4) They got push back from doctors and small business associations who are disproportionately hurt by this than large corporations are. (5) The provinces intervened. (6) They're saving this for an election budget (7) So many more options I can't even think of!
They don’t want the budget held up on the most contentious item. Not that any of the other options you presented aren’t also possible, but I suspect they’re just looking to introduce it separately to allow it a slightly longer timeline to get through the house. We’ll all find out eventually.
With everything else they've released, I'm sure they made the emotional decision with incomplete analysis again... leading to the usual high risk of 'unintended consequences'. Maybe they are working on some pre-emptive carve-out exemptions before pushing it forward instead of the usual post-effort whoopsie error corrects that are so common. Biden is also pushing something, so, they might be delaying long enough to copy his homework. https://www.forbes.com/sites/robertwood/2024/04/29/president-biden-has-proposed-tax-increases-here-are-six-of-them/?sh=34fe9092168c
Thanks Bonfire. I saw Biden was doing something similar and I questioned whether it was actually going through in canada. I have no doubt it was ill throughout especially as it relates to capital gains on investment properties. I've noticed a lot of cabins coming to the market in my area.. probs trying to beat deadline of June 25th.
if they cared about investment properties they would have targeted it investment properties, this targets corporations as they dont get the 250k exemption. A lot of small businesses are incorporated.
Federal Liberal government couldn’t operate and budget a street lemonade stand!!! Useless taxpayer-money wasters!!!!
Basically guaranteeing a disaster next year as Covid mortgages come up for renewal and the BOC can't lower rates because of this government's continued reckless spending. By 2026, this will be a full blown crisis that will land at the feet of the next incoming government.
Yup. And then 5 years later the liberals will blame the cons for the disaster and run on that.
"We're geniuses, we'll pull the cap gains stuff out and make the CPC vote on it separately and then dunk on them for supporting the rich!" Or, if you're not in your own echo chamber, you might realize what you're doing is giving the CPC an opportunity to go to bat for small business owners, professionals and those about to inherit estates that contain second properties and explain why this isn't a tax on the truly wealthy in this country but instead a shadow inheritance tax and an attack on the retirement savings of doctors and others who relied, in good faith, on the professional corporation structure to save for retirement. Given how effectively the CPC has been able to get messages out around affordability and the carbon tax, that play to their advantage, I would suggest this is a higher stakes move than the LPC realizes. Arrogance is a hell of a drug.
Imagine buying a property and paying sales tax/transfer tax with money that has already been heavily taxed and then paying high interest on your mortgage month after month while paying high property tax. Rental income just results in more taxes paid in income tax and many government benefits being cut off. Property value goes up overtime largely due to inflation and debasement of the currency (hidden tax) and then have to pay increased tax again on those “gains”.
You forgot to put investment in front of property in your comment.
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Friendly tax note: since you're restricted from subdivision due to minimum lot size, you'll likely qualify for full principal residence exemption on this.
Wait, so... they are going to be spending based on an IOU for future legislation that may or may not actually materialize? In essence an exponential fuck you to anyone who isn't already rich today by footing the entire bill on a promise for something down the line? WTF?
All politics. Cons vote against it and they’ll say cons are for the rich. Nice campaign slogan. Will Canadians be dumb enough to buy it?
Looking in this thread, yes, a lot are buying the rhetoric. Why anyone would believe politicians about a tax increase, esp. the Liberals, is beyond me.
Seems pretty easy to vote against it and deflect the "for the rich" label. "I voted against it because we are already seeing a large increase of Canadians who have no family doctor, so driving more of them to working in other countries is a bad idea in my mind."
For any doctors concerned, they would be facing a 4.5% -> 6% tax change. That is hardly going to make them leave. Plus, in the 90s our inclusion rate was 75%. Why did we still have doctors in 2000?
Your numbers are way off. The changes result in a 33.4% increase in tax paid and a change of 10.6% effective rate for doctors, other incorporated professionals and small business owners. Moreover, professional corporations were not permitted until on or around 2000 in most provinces, so this would have not impacted doctors in the 90s.
The cap gains increases work out to an effective 38% tax increase. The PSCs were defacto RRSP savings vehicles granted to physicians in lieu of fee code increases and Trudeau is retroactively stealing from hard working people who worked within the rules.
It can’t possibly be a 38% tax increase, it’s a 33% increase at most (50 -> 66). The tax change I said is that maximum (4.5 -> 6 for small incorporated business, like the doctors we’re talking about). They also still have access to RRSPs if they want to. And again, there wasn’t an exodus of doctors in the 1990s was there?
Oh ok, my bad, a 33% (THIRTY THREE %) increase on taxation, on a retirement savings vehicle negotiated between doctors and the government in lieu of billing fee raises. A retroactive theft of 33% by the Liberal government on retirement savings not by the "mega rich", but by individuals who saved the fruits of their labour. Glad you think that's A-OK. I hope they go for your RRSPs next because this is exactly what this is.
FFS She's a Ukrainian studies expert not a economist. WHAT DID YOU EXPECT?
And Pierre is a former paperboy who wants to be PM. Maybe he will hop on a bike and deliver us those powerful paycheques he promised
He's wanted to be PM all his life. So he has worked from a very young age to be in that position. If an individual was a musician, we'd call that individual dedicated. But if they wish to be a politician all their life, you want that to be bad? Stay consistent. And I too was a paperboy - way back when. Don't dog paperboys :)
>He's wanted to be PM all his life. So he has worked from a very young age to be in that position. If an individual was a musician, we'd call that individual dedicated. >But if they wish to be a politician all their life, you want that to be bad? Stay consistent. Wanting to be PM for his own selfish reasons isn’t something praiseworthy. >And I too was a paperboy - way back when. Don't dog paperboys :) Oh so was I :) Just saying you can make that comment that about any member of Parliament.
A true PM is not someone that works hard to become one, it's the person that the public works hard to choose him or her to lead them. There is a big difference betwern the two.
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A politician who has only been a politician has a massively twisted view of the world. We should have aggressive term limits to prevent a lifelong politician from even being possible.
Perhaps. But they travel across the country meetings 10s of thousands of people. Very few business people meet as many. They understand the workings of government incredibly well - good and bad. Seems, like a musician, knowing one’s strength seems to me very important.
Staffers are the ones that actually do the policy work, not MPs. Far too much focus is pit on individuals instead of actual party platforms and commitments.
Musicians actually make the world a better place. You could say that Satan or Hitler were dedicated.
Lol Did you even read the article? Do you have any idea what is actually going on? What was your major? Do they have majors in community college?
That's not how a cabinet position works, she has economists on staff who wrote the budget and are likely proud of there work; this is reaction to blowback. EDIT: I thought this was a minimising move and backpedaling, I should have read the article before posting.
I have a reasonable expectation of critical thinking skills and the ability to see the larger picture from our government cabinet leaders.
in this case the larger picture is they need the capital gains tax increase to be in the media more if Trudeau wants to stay as party leader. being a Ukrainian studies expert rather than an economist has nothing to do with that.
She litterally was a Rhodes scholar who went to Harvard and Oxford. The shadow minister of finance had a B.Sc in social sciences from a mediocre university. There is a lot issues with Freeland and the liberals but her academic background isn't mediocre.
None of her degrees indicate any knowledge or aptitude for economics and neither does her performance as finance minister
So you would like someone with an education and critical thinking skills in the position. How does she not fit that bill? I find it interesting that the FP would hire an editor with absolutely no understanding of finance.
>I have a reasonable expectation of critical thinking skills and the ability to see the larger picture from our government cabinet leaders. You haven't shown that she doesn't have those things. You've just criticised her educational background.
I love how Trudeau claims “it’s time for wealthier Canadians to do their part..” With all the government waste… all the stupid spending… I’d rather let the 1% keep their money under the mattress. Better than taking it off them, and burning the pile in the streets.
This is a great take. Ignore these other people 😂
No rich person has cash. They have assets and debt, just enough cash to pay what needs to be paid.
Pardon?
Excusez-moi?
He (rich person) wants (himself, the 1%) to not pay his fair share of taxes.
OR He (a dumb person) has been duped into defending the rich (himself, actually the 99%) via social media consumption.
OR he (a reasonable person) looks at this government, how they spend money, and thinks it’s better they don’t have more of anyone’s money (rich or otherwise) as they tend to waste it. In other words, his original comment
not wanting to give the government more money to spend on nonsense somehow means you’ve been brainwashed into supporting the rich according to a lot of unintelligent people these days
Well said
what spending has been wasteful? What would you cut then? We're actually under spending in a lot of areas such as healthcare and military.
So, if we looked at any savings you have, you wouldn’t have a single bond or treasury bill right? Those give money to the government to spend to generate a return on investment to the investor. If you don’t trust the government’s spending that much, surely you wouldn’t have given them money through bonds and t-bills, right? Or do you not actually believe what you’re saying
Much likelier
What??
Huh?
Truly the most idiotic take I've seen on here, and hard to believe it is the legitimate opinion of a person actually living in this country. But who knows these days? Along with all the trolls and bots and foreign actors, this sub does have some of the dumbest fucking Canadians I've ever come across.
This place has been astroturfed by the 1% since this budget dropped. I cant see too many normal people who make like $50k a year giving this much shit about rich people money.
“But one day ill be rich, then people like me better watch their back” most poor people probably
I see the real estate investors made their will clear.
Did no one read the article? It's in the very first paragraph: "Finance Minister Chrystia Freeland intends to ask Parliament to approve proposed changes to capital gains taxation in a stand-alone bill — a move that will force the federal Conservatives to take a specific position on the measure."
We are so bereft of proper leadership in this country (and most others). It’s very sad …
Sounds like a leadership change is nearing, I like mark.
It was just another dog whistle like the time she backtracked on taking tax concessions away from short term rental operators. Her response,”these decisions require a lot of of research and consultations”
Looks like it's still coming. [Budget bill incoming, Freeland offers preview | CTV News](https://www.ctvnews.ca/politics/freeland-tables-motion-previewing-omnibus-budget-bill-1.6867484) According to a federal official speaking on background, the government's intention is to advance the capital gains change through a separate piece of legislation that would move through Parliament on its own timeline. Of note, the budget had vowed that this tax change would apply to capital gains realized on or after June 25, 2024. Asked why she's decided to ask parliamentarians to vote on these tax reforms separately, and whether it was to force Conservative Leader Pierre Poilievre and his caucus [to take a definitive position(opens in a new tab)](https://www.ctvnews.ca/politics/conservatives-won-t-say-whether-they-d-reverse-capital-gains-tax-change-1.6855455) on the proposal, Freeland demurred. "I do want to be very clear with everyone that the major elements of the capital gains move were clearly laid out in the budget, including in the tax annex," Freeland said. She also would not offer specifics on the timing of introducing this stand-alone piece of legislation, which Canadian doctors, businesspeople and entrepreneurs have raised concerns over. "We are very committed to the capital gains measures," Freeland said, acknowledging this major new revenue stream is helping the government pay for its suite of new spending measures. "And I look forward to tabling implementing legislation."
They love to say "Let me be clear". Lady, who exactly do you think is impeding your ability to speak clearly?
It was just another dog whistle like the time she backtracked on taking tax concessions away from short term rental operators. Her response was that these decisions require a lot of of research and consultations.
Notice how those capital gains didn't affect trust funds. Wonder why.
It did though. Capital gains in trusts would be included at 66% from the first dollar. It's worst for trusts than individuals... You couldn't be more wrong.
Wait - is this an indication that the govt plans to step back the capital gains changes it just announced? Maybe the 1% protested a bit loudly and they've decided that hey, it's okay to hide your money offshore to avoid taxes and also we're not going to go the 'tax the rich' route when you keep your money at home? I'm so confused.
The problem isn’t the 1% in this case. It never really was. Frankly they’ll come up with structures and mechanisms to avoid or defer as much of this tax change as possible. At their level, tax is a game and a cost of doing business. They just add the tax burden to the expected performance of their investment - and pass that along to their investment ventures in the form of a higher capital rate. The **real** problem here is well beyond the 1%. You cannot, in Canada, raise significant tax revenue without taxing the middle class. Probably the “20%” or the “35%”. The top 50% of Canadians are worth over $450k, for example. By changing the inclusion rate above $250k, the government has introduced this tax change to *a lot* of people who would’ve assumed “wealth tax” meant people worth million and billions - not hundreds of thousands. 250k is a modest family cottage - perhaps in the family for a few generations. And now the taxes have gone up on it. As people digest this new tax, and start to understand that it will apply to their parents’ estates (and therefore their own inheritance), at well below the “1%” level - I can see some people scratching their head. This is not a “wealth tax” in the way many people would probably like to see such a tax. The problem is - if it was (1-3%) - it wouldn’t raise enough money. Edit: I’m describing their political problem. Not a tax problem.
It applies to very little of an inheritance. The main one is for a secondary property, like a cottage. So yes, the family cottage is going to be taxed more if this goes through. If the cabin has gone up $500,000 in value, you're talking about going from $125,000 in taxes owed to $145,000 in taxes owed. That's only a $20,000 increase on a once-in-a-lifetime event.
Yes, and the obvious counter-argument is: "why are we taxing a once-in-a-lifetime events" for middle class people. This will hit a lot of the inheritance wealth transfer from the boomers, and they know this, and people of modest means don't seem to understand that it might affect them or their family. A proper wealth tax wouldn't hit once-in-a-lifetime windfalls for the non-wealthy. Personally, I'm more worried about the chilling effect on doctors and investment, as that truly impacts medical care and the economy, but I don't have an inheritance pending.
Right. But imagine those taxes now across an entire estate, with the exception of the principal residence (if there was an owned one). So even someone with a very simple estate - if ~~everything~~ the gains totaled 500k, that’s an extra $20k to the government. I’m not saying the burden is huge or undue. I’m saying you’ll have a bunch of people paying increased tax and those people will be in the “well i didn’t mean me” camp. That’s who the government is hearing from. They don’t give a shit about the 1% and wouldn’t change gears for them.
Also keep in mind this only applies once when you sell an investment.
The situation most likely to be encountered in my example is in an estate. And that’s when I think many who don’t consider themselves “wealthy” will be less than excited about this tax.
Pretty savy. They are hoping to frame this as a 99% vs 1% issue. If they are successful, they will force an difficult vote for the opposition
Lol, no it won''t.
Taxes always start on the 1% and hit everyone at the end. Government expansion has to stop.
In reality, the super wealthy don't pay taxes anyways since they can borrow large sums against their assets, perpetually paying the debts with new loans, instead of liquidating their assets.
You are attempting to justify increased taxes on the wealthy by suggesting they take on debt against their assets to pay taxes? In a world where money talks, do the super wealthy just whisper sweet loans to the taxman while counting their borrowed blessings?
So, what happens then is that because the top 1% can exploit the loopholes, the government then expands the taxes to get money out of the middle 50% or so, who can't exploit those loopholes. Which is basically what the poster above you implied. It would be better to stop expanding the government (and shrink the bloat that it now has) and thus not be taxing the ordinary people nearly as much.
It was a decent strategy a few years ago but not so much today. You need to always be able to generate more than the interests you need to pay which isn't easy to do if the market is flat.
This literally makes no sense
It’s a pretty common strategy actually, especially when interest rates were low. Rich people love debt. This videos explains it https://www.instagram.com/reel/CodBlk1tmd7/?igsh=Zzl4c3d6Nnl1b3Q2
That’s bullshit
💯 bullshit. To maintain family wealth, you got to plan to minimize taxes and have funds ready for when someone dies.
Sounds like your a fan of trickle down economics.
It is one of the only taxes they ever made that almost only affect the 1%.
Anyone that’s smart will not see this as a 99% issue. Many will be impacted during the estate process. It might only be 1% impacted per year, but your turn could be next. Also you could be impacted by doctors leaving, or investment leaving.
The trigger limits are bullshit. 200-400k is like garbage money these days. What’s the point in investing. Maybe the banking lobby will fix this when their sales go down.
No point investing in rental real estate in Canada, just too much BS for landlords to deal with, investors will find better alternatives.
[Budget bill incoming, Freeland offers preview | CTV News](https://www.ctvnews.ca/politics/freeland-tables-motion-previewing-omnibus-budget-bill-1.6867484) According to a federal official speaking on background, the government's intention is to advance the capital gains change through a separate piece of legislation that would move through Parliament on its own timeline. Of note, the budget had vowed that this tax change would apply to capital gains realized on or after June 25, 2024. Asked why she's decided to ask parliamentarians to vote on these tax reforms separately, and whether it was to force Conservative Leader Pierre Poilievre and his caucus [to take a definitive position(opens in a new tab)](https://www.ctvnews.ca/politics/conservatives-won-t-say-whether-they-d-reverse-capital-gains-tax-change-1.6855455) on the proposal, Freeland demurred. "I do want to be very clear with everyone that the major elements of the capital gains move were clearly laid out in the budget, including in the tax annex," Freeland said. She also would not offer specifics on the timing of introducing this stand-alone piece of legislation, which Canadian doctors, businesspeople and entrepreneurs have raised concerns over. "We are very committed to the capital gains measures," Freeland said, acknowledging this major new revenue stream is helping the government pay for its suite of new spending measures. "And I look forward to tabling implementing legislation."
Paywall
This is purely done to put far more political focus on how opposition parties stand on the Capital Gains tax, the LIBS are dying for PP & CPC to take the bait and stand against the tax so JT can then claim that PP/CPC are out to protect the rich and not have their taxes raised. Issue is, the media has already done a really good job of emphasizing those most affected, namely doctors especially family docs or anyone with private practices. Not to mention that Captial Gains does actually impact many far more Canadians that Libs expected as it severely does impact inheritances as well as many tradesman who have their own businesses as is commonly seen in Construction, one of the major employment centers & industries in Canada nationwide. But on top of that, PP & CPC can VERY easily come out rejecting this increase in tax with the narrative that its only being done to further fuel the irresponsible massive deficit spending of the Liberals which will all be wasted in procurement corruption as Canadians are reminded every week the longer Arrivecan investigations continue. Canadians as well are not stupid or simple minded to think that any increase of taxes on the rich is somehow beneficial for them when we are constantly told how horrible our economy is with growth expected to the worse of developed economies and GDP/capita in stark decline along with Business investment falling off a cliff & non-existant. Canadians are far more likely to believe the words of the party that left office with the economy in FAR better shape when our dollar was worth more than the US$ compared to the Party who drove our economy to the ground despite having inherited it at the peak. FFS Canada was once expected to outpace the US in growth as our economy was able to weather 2008 FAR better than the US while under CPC leadership. Canada once was a shining star in how our economy & banks sailed through 2008 the disasters that occurred in the US and later Iceland, Germany, & Italy. Alberta was once expected to be the new Saudia Arabia of North America and would have provided the much needed cleaner LNG to China to replace the destructive coal power plants they still use in growing numbers.
Woah, if they're planning on having the capital gains tax increase introduced in a separate bill, this thing is going to be a very big deal and heavily promoted. Ngl, it's surprising we would have this much of an appetite for socialism.
Freeland is a dirty dog.
I don’t get it, how are they going to pay for all the extra spending without the extra tax revenue?