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bremon

Member
Oct 27, 2017
7,926
prophetvx, you're sounding similar to David Dodge has this past week when he exclaimed that this was the worst budget since 1982 and scares away investment, etc.

You brushed off the comments earlier, but if you're someone who's affected by this after you've maxed out your TFSA, you're doing pretty damn well anyway.

vast majority would have it sit in a bank account and accumulate interest. It's why bank interest is taxed at your full rate and capital gains are not.
Luckily for the government, they're incentivized to invest because our bank interest rates are dog shit and have been for decades.
 

prophetvx

Member
Nov 28, 2017
5,345
prophetvx, you're sounding similar to David Dodge has this past week when he exclaimed that this was the worst budget since 1982 and scares away investment, etc.

You brushed off the comments earlier, but if you're someone who's affected by this after you've maxed out your TFSA, you're doing pretty damn well anyway.
I don't know who David Dodge is. I'm an immigrant to Canada, I haven't had the luxury of accumulating TFSA headroom like most Canadian's have. I didn't brush off comments around TFSA but if anyone thinks ~6k of tax free investing a year is going to fund retirement and "doing pretty damn well", that's a pretty sad indictment of Canadian's individuals ability to fund their retirement. RRSP's are just tax deferment and if you do well investing there the government gets plenty back.

But you're right, this stupidity does concern me because if I ever choose to move back home it's now a many year strategy or entirely unviable even though those savings are far from the billionaire class this is supposedly only targeting.

Luckily for the government, they're incentivized to invest because our bank interest rates are dog shit and have been for decades.
Agreed but that's shifting currently.
 
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tokkun

Member
Oct 27, 2017
5,418
Tbh this doesn't really answer the question though. I'm sure there's a reasonable reason.

Governments want to encourage investment, because it leads to a more productive society.

Imagine I have $1 million dollars.
  • In scenario A, I keep it buried in my backyard.
  • In scenario B, I lend the money out to to a farmer. She uses it to buy new equipment that improves her crop yields, then pays me back the loan + interest.
Obviously that is an idealized example, but it illustrates the general principle. As long as you believe that people are capable of taking resources and creating something that is more valuable than the sum of their parts, then investment makes sense.

A problem with this system is that capital gains includes not only investment in enterprises that seek to increase the overall wealth of society, but also profits from increases in value of speculative assets. For example, if I use the money to buy a painting and later resell the painting for a profit, I would still get the tax benefit but haven't actually contributed anything to society.
 

ergoakari

Member
Oct 28, 2017
428
Canada
We need more taxes in Canada, not less. We need to pay for better health care and we need to cover the living expenses of those that are unhoused.
No one needs more than 200k a year, that's insane.
 

Chippewa Barr

Member
Aug 8, 2020
3,985
Recall that we do not vote people in with elections in Canada, we vote people out.

Liberals under Trudeau are absolutely cooked and it's almost a guarantee we're getting Canadian Milhouse as next PM - a dude who has done literally nothing as a career politician. His main platform is "Trudeau bad" which isn't actually incorrect, but still depressing lol.

Regardless of who gets in, we aren't gonna get any meaningful (let alone beneficial) change from either.

Until a party comes out and says they are:

1) drastically reducing immigration (which is usually beneficial, but we've gone overboard here),
2) pumping a huge amount of homes into the market on the supply side (give the CMHC their powers back), and
3) investing in domestic industry (our economy is literally real estate speculation)

then nothing will change. These three things are major changes that need to happen. Everything else that any party puts out is just fluff pieces for the most part. Without those above - nothing gets better.

All parties in Canada are absolutely trash right now.
 

prophetvx

Member
Nov 28, 2017
5,345
We need more taxes in Canada, not less. We need to pay for better health care and we need to cover the living expenses of those that are unhoused.
No one needs more than 200k a year, that's insane.
This has nothing to do with how much someone earns per year. It can certainly impact it but that's not how capital gains work.

Sell stock to buy another stock, capital gains.
Sell your first apartment that you upgraded to a house from, capital gains.
Sell your business, capital gains.
Get equity as part of your employment, capital gains.

Many of these events can be once in a lifetime events.

If we needed more taxation adding another higher tax bracket would give much better coverage of the people they're supposedly targeting but the optics of it and not being loosely associated with housing doesn't sell as well in an election year.
 
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Consequence

Member
Oct 27, 2017
1,989
This has nothing to do with how much someone earns per year. It can certainly impact it but that's not how capital gains work.

Sell stock to buy another stock, capital gains.
Sell your first apartment that you upgraded to a house from, capital gains.
Sell your business, capital gains.
Get equity as part of your employment, capital gains.

Many of these events can be once in a lifetime events.

If we needed more taxation adding another higher tax bracket would give much better coverage of the people they're supposedly targeting but the optics of it and not being loosely associated with housing doesn't sell as well in an election year.
Selling an apartment to upgrade to a house is not capital gains, there's a primary residence exemption for that.
Selling your business will be aided by your lifetime capital gains exemption in most scenarios
If you get over 250k in a year of equity from your compensation package, you can handle the marginal increase

I'm beginning to lean against my earlier statement that you are arguing in good faith here.
 

ergoakari

Member
Oct 28, 2017
428
Canada
Selling an apartment to upgrade to a house is not capital gains, there's a primary residence exemption for that.
Selling your business will be aided by your lifetime capital gains exemption in most scenarios
If you get over 250k in a year of equity from your compensation package, you can handle the marginal increase

I'm beginning to lean against my earlier statement that you are arguing in good faith here.

That's what I'm trying to understand. This only helps the average person. It seems to only matter for folks with massive compensation packages.. That being said, it could be worded better.
And yes, if you sell your buisness, and make more than 250,000$ a year, you best damn be taxed hard for it, even if it's a once in a life time event.
 

prophetvx

Member
Nov 28, 2017
5,345
Selling an apartment to upgrade to a house is not capital gains, there's a primary residence exemption for that.
Most people here in Calgary tend to buy an apartment and hold onto the apartment after upgrading. That is not capital gains exempt. Landlords aside, it's a common wealth building practice in this country. It's not a yearly event to sell these assets but I also believe this should be fully taxable.

Selling your business will be aided by your lifetime capital gains exemption in most scenarios
Assuming you're the registered business owner, if you're a founding member with equity, moving countries etc you're ineligible.

If you get over 250k in a year of equity from your compensation package, you can handle the marginal increase
That's not how equity compensation packages work. It's here is $20k as part of your total compensation, hopefully it'll be worth 10 times that when the company is sold. Often you don't have control over when that happens.

So while you may make over $250k in capital gains, it may have added $50k to your salary per year over the last 5 years in real terms.

Again, not a yearly thing.

I'm beginning to lean against my earlier statement that you are arguing in good faith here.
You can think whatever you want to think. It's bad policy, poorly targeted and will skim years of peoples retirement savings for people who really shouldn't be losing it. It's an outlier on global policy and ultimately a populist move.

I'm all for making all secondary property sales fully taxable. That actually addresses the problem.
 
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Chakoo

Member
Oct 27, 2017
2,842
Toronto, Canada
Man, my linked-in is awash with VC and CEO flipping the ***k out over this. I'm afraid to add my 2 cents and piss off much of my network. =/
 

StevieP

Member
Oct 27, 2017
3,283
1) drastically reducing immigration (which is usually beneficial, but we've gone overboard here),

This is a popular conservative talking point. Do this to any massive degree and we're in a recession. Immigration is keeping the economy stable
1) our job market will tank (guess who's doing those jobs that "old stock" Canadians aren't? Remember the lacking employment in the middle of covid?)
2) our post secondary institutions will tank (they're already severely underfunded and rely on immigration - provinces aren't footing enough cash to them)
3) our non-immigrant populations are ageing and in decline, and birth rates have fallen - where does Canada grow as a country? Guess who gets the blame

2) pumping a huge amount of homes into the market on the supply side (give the CMHC their powers back), and
The feds aren't getting into the housing building game anymore. That will be true of any party, including our most left leaning NDP. And really, should they? Houses are the responsibilities of municipalities, who are creations of the province. Most of Canada's problems are entirely on the provinces, but here we are with Trudeau getting the blame for everything. There are nimrods in Ontario protesting our ANNUAL SUMMER BLEND GAS INCREASE with "F Trudeau" signs... Hilarious.

3) investing in domestic industry (our economy is literally real estate speculation)

I'm no slumlord, and I work in IT myself. But what does Canada offer the world? We're not building weapons like the US. We're not building... everything else in the world like China. Which political party is going to willfully tank our real estate based economy and drive us into a full blown depression? Whether this actually needs to happen to fix stuff is a different discussion because I don't think anyone's going to tank the country's economy to find out, right? Certainly not now.
 
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Consequence

Member
Oct 27, 2017
1,989
Most people here in Calgary tend to buy an apartment and hold onto the apartment after upgrading. That is not capital gains exempt. Landlords aside, it's a common wealth building practice in this country. It's not a yearly event to sell these assets.


Assuming you're the registered business owner, if you're a founding member with equity, moving countries etc you're ineligible.


That's not how equity compensation packages work. It's here is $20k as part of your total compensation, hopefully it'll be worth 10 times that when the company is sold. Often you don't have control over when that happens.

So while you may make over $250k in capital gains, it may have added $50k to your salary per year over the last 5 years in real terms.

Again, not a yearly thing.


You can think whatever you want to think. It's bad policy, poorly targeted and will skim years of peoples retirement savings for people who really shouldn't be losing it. It's an outlier on global policy and ultimately a populist move.

I'm all for making all secondary property sales fully taxable. That actually addresses the problem.

This is a ridiculous amount of goal post moving and contradiction to arguments you've made earlier.

"Most people" buy an apartment and then hold onto it after buying a house? No they do not. For the ones that can afford to do so, they're landlording. Which you were talking against earlier in the thread. Seems like this policy is exactly targeting the programs it is funding , which you tried to say it was not doing.

If you're maintaining equity in the company after selling, you're not retiring, so seems like being taxed on those gains makes lots of sense and isn't harming people's retirement funds like you continue to mention. And if you're moving country after selling, I have no issue with a marginally increased tax burden. That's just enough protectionism.

If your equity in a company cashes out suddenly to such an amount impacted by those changes, you can handle the marginal increase. It wasn't like you were planning against a specific amount resulting from those options, since you're telling me that this was such a sudden scenario.

You are concocting scenarios which are either much rarer than you present them as or acceptable targets for this policy with multiple means to plan around or weather a marginal increase.
 

Scuffed

Member
Oct 28, 2017
10,933
Trudeau has been so active since his poll numbers tanked. I really wish he had some people around him that had any kind of pulse and could have maybe started this torrent of good things... I don't know a few years ago? Now because he took so damn long to read the room we are assured to be getting PP as our next PM and it will more likely than not be a majority. Fucking great.
 

prophetvx

Member
Nov 28, 2017
5,345
This is a ridiculous amount of goal post moving and contradiction to arguments you've made earlier.

"Most people" buy an apartment and then hold onto it after buying a house? No they do not.

For the ones that can afford to do so, they're landlording. Which you were talking against earlier in the thread. Seems like this policy is exactly targeting the programs it is funding , which you tried to say it was not doing.
lol housing is the only investment vehicle most Canadian's leverage. It's turned to shit over the last 5-10 years but it's a very common practice in my age group (around 40). The home ownership rate in this country is around 65%, where do you think the other 35% comes from?

I'm not moving the goalposts at all, I was explaining that capital gains is not a yearly thing and the events that trigger it. You seem to think I support cheap capital gains on housing, I don't. It's decimated the housing market in this country and this government is insistent on placing ineffective bandaids to address it.

If you're maintaining equity in the company after selling, you're not retiring, so seems like being taxed on those gains makes lots of sense and isn't harming people's retirement funds like you continue to mention. And if you're moving country after selling, I have no issue with a marginally increased tax burden. That's just enough protectionism.
Who said anything about "maintaining equity after selling"? I'm saying if you're merely a equity owner, you can't control timing or the size of your divestment.

How is someone who works at a company for 10 years on a $100k salary, makes around $500k in capital gains in a single liquidation event more wealthy or better off than someone who draws down $249k in capital gains per year on top of their regular $1m in compensation? How do they deserve to pay more tax?


If your equity in a company cashes out suddenly to such an amount impacted by those changes, you can handle the marginal increase. It wasn't like you were planning against a specific amount resulting from those options, since you're telling me that this was such a sudden scenario.

You are concocting scenarios which are either much rarer than you present them as or acceptable targets for this policy with multiple means to plan around or weather a marginal increase.
I'm not concocting scenarios, capital gains by its very nature is chunky. It's highly variable from year to year. Those with high wealth will be able to balance the impact of this, those without the means to do so, won't.

Again, the whole point of this is to fund housing. Why isn't housing fully taxable? Why didn't they add an additional tax bracket to target the wealthy? Why didn't they remove interest tax deductions for housing? They cut to the actual problem, instead of broad, blunt taxes.
 
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Consequence

Member
Oct 27, 2017
1,989
lol housing is the only investment vehicle most Canadian's leverage. It's turned to shit over the last 5-10 years but it's a very common practice in my age group (around 40). The home ownership rate in this country is around 65%, where do you think the other 35% comes from?

I'm not moving the goalposts at all, I was explaining that capital gains is not a yearly thing and the events that trigger it. You seem to think I support cheap capital gains on housing, I don't. It's decimated the housing market in this country and this government is insistent on placing ineffective bandaids to address it.


Who said anything about "maintaining equity after selling"? I'm saying if you're merely a equity owner, you can't control timing or the size of your divestment.

How is someone who works at a company for 10 years on a $100k salary, makes around $500k in capital gains in a single liquidation event more wealthy or better off than someone who draws down $249k in capital gains per year on top of their regular $1m in compensation? How do they deserve to pay more tax?



I'm not concocting scenarios, capital gains by its very nature is chunky. It's highly variable from year to year. Those with high wealth will be able to balance the impact of this, those without the means to do so, won't.

Again, the whole point of this is to fund housing. Why isn't housing fully taxable? Why didn't they add an additional tax bracket to target the wealthy? Why didn't they remove interest tax deductions for housing? They cut to the actual problem, instead of broad, blunt taxes.

You were obfuscating details about housing sale scenarios to argue against this policy. "Sell your first apartment that you upgraded to a house from, capital gains." Then you switched to talking about KEEPING that apartment while owning another home. That is moving the goal posts.

Can you show the math that the tax burden over ten years in this scenario is greater on the 100k salary individual than the 1million salary individual? And how different this is than the previous tax structure? This is your scenario that you proposed.

And now you have a mishmosh of other proposals. I'm not against any of them, but how can you complain that a capital gains tax increase is broader and more blunt in service of funding housing initiatives than a whole additional tax bracket on the wealthy?
 

prophetvx

Member
Nov 28, 2017
5,345
You were obfuscating details about housing sale scenarios to argue against this policy. "Sell your first apartment that you upgraded to a house from, capital gains." Then you switched to talking about KEEPING that apartment while owning another home. That is moving the goal posts.
I didn't obfuscate anything. Just because you chose to misread what was written.

Can you show the math that the tax burden over ten years in this scenario is greater on the 100k salary individual than the 1million salary individual? And how different this is than the previous tax structure? This is your scenario that you proposed.
In a given year, the tax burden on that individual is higher pertaining to capital gains even though over that investment period, the person on $1m per year has withdrawn 5 times more.

And now you have a mishmosh of other proposals. I'm not against any of them, but how can you complain that a capital gains tax increase is broader and more blunt in service of funding housing initiatives than a whole additional tax bracket on the wealthy?
I've been consistent on stating that throughout this thread. Capital gains is broader and more blunt because it's a tax on the velocity of transactions, not actual income, just like a sales tax is. It can be worked around by the wealthy using strategic loss harvesting, trusts, spousal balancing etc. There is only so far you can go with personal income tax deductions.
 
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Chippewa Barr

Member
Aug 8, 2020
3,985
This is a popular conservative talking point. Do this to any massive degree and we're in a recession. Immigration is keeping the economy stable
1) our job market will tank (guess who's doing those jobs that "old stock" Canadians aren't? Remember the lacking employment in the middle of covid?)
2) our post secondary institutions will tank (they're already severely underfunded and rely on immigration - provinces aren't footing enough cash to them)
3) our non-immigrant populations are ageing and in decline, and birth rates have fallen - where does Canada grow as a country? Guess who gets the blame


The feds aren't getting into the housing building game anymore. That will be true of any party, including our most left leaning NDP. And really, should they? Houses are the responsibilities of municipalities, who are creations of the province. Most of Canada's problems are entirely on the provinces, but here we are with Trudeau getting the blame for everything. There are nimrods in Ontario protesting our ANNUAL SUMMER BLEND GAS INCREASE with "F Trudeau" signs... Hilarious.



I'm no slumlord, and I work in IT myself. But what does Canada offer the world? We're not building weapons like the US. We're not building... everything else in the world like China. Which political party is going to willfully tank our real estate based economy and drive us into a full blown depression? Whether this actually needs to happen to fix stuff is a different discussion because I don't think anyone's going to tank the country's economy to find out, right? Certainly not now.
I'll preface this by saying I've literally never voted Con in my life lol.

We absolutely need to go back to pre-2015 levels where we were accepting around 200k a year. It had been that way for like 30 years so even a slight increase would have been fine - but the govt went wild and ramped up the numbers by more than 500% with us hitting over 1M new people in 2023. That is not sustainable for public services and housing concerns. Immigration is not keeping the economy stable - it's simply flooding the market with cheap labour as the VAST majority are non-permanent residents.

All the points you made regarding the immigration topic are the faults of the governments in power over the years - be them Liberal or Conservative. I honestly believe we need a true recession to root out all the bad policies that have compounded over the years - that's literally what a recession provides as an outputted result - a policy reset. If the businesses that rely on these imported and exploited workers cannot survive without them, I say let them fail.

Post secondary are just artificially inflating costs for students and are purposefully pricing out domestic students (my tuition from my university I paid in 2012 has gone up by over 90% in that time - almost double in ten years with zero changes/additions/expansions in the university as a whole). In addition, a ton of these people coming in are going to degree mills and are getting scammed anyway - the common newcomer (which are the majority) aren't going to Queens or UoT.

Birth rates a low and citizen pop is ageing out, but the older and reasonable immigration levels covered these numbers and would be completely fine. The Canada 100M by 2100 people are loons.

Should the Fed get into housing again? YES. Canada needs a national housing strategy - and we had one - until the provinces started crying about overreach. If we can vaccinate like 85% of population in a coordinated effort, we can no doubt put together a home building plan (insane number of homes per year required aside...approximately 4M more than we currently do, which is like less than 300k). Get CMHC back to design-builds and have a limited number of designs that are easy for any subbed GC. Have them Rent-to-Own from the GoC and we could actually fix the supply WITHOUT cratering our own RE market. If the Feds want to throw money around to get elected like they are right now into un-thought out programs, toss the money to this.

As far as producing, we have to start leveraging our natural resources - oil, gas, uranium, etc. We used to be good at this, and actually had a sovereign wealth fund (for Alberta) similar to Norway (sitting at like $1.5T USD at the moment by the way) until the Cons out there plundered it back in the 80s and 90s. We still do great sustainable forestry which is getting back to normal now...much better than when Covid was going on and Trump was putting tariffs on us.

To be honest - no politician at the moment is up to the task. They are more concerned with being elected and brokering post-politics careers than actually improving anything. Liberals will drown under Trudeau, Cons will keep pushing nobody candidates, and NDP will fall further into obscurity.

Trudeau during his majority could have done some insanely good things with almost zero pushback and squandered it. Him and Singh could have made great legacies for themselves as a coalition govt, but they just don't care - both silver spoon upbringings and it shows. And now both are throwing money at the crowds hoping it's enough to win JT another election and Jagmeet can keep his role as remora fish. Cons are just patiently waiting to win so they can put the "for sale" sign on anything and everything.

We are in rough shape.
 

Becks'

Member
Dec 7, 2017
7,493
Canada
Post secondary are just artificially inflating costs for students and are purposefully pricing out domestic students (my tuition from my university I paid in 2012 has gone up by over 90% in that time - almost double in ten years with zero changes/additions/expansions in the university as a whole). In addition, a ton of these people coming in are going to degree mills and are getting scammed anyway - the common newcomer (which are the majority) aren't going to Queens or UoT.

Tuitions are frozen for domestic students in Ontario and Ford decided to reduce funding so unis have to rely on international students to fund them further. Universities are already hitting departments hard, I know Queens and TMU have already majorly cut some programs and in some cases they can't find department heads because of lack of budget. Professors don't come cheap anymore.

Also requirements to permanently immigrate to this country are already one of the hardest in the world, you need to come in with a work permit or a study permit to get a chance to get invited for PR.
 

Chippewa Barr

Member
Aug 8, 2020
3,985
Tuitions are frozen for domestic students in Ontario and Ford decided to reduce funding so unis have to rely on international students to fund them further. Universities are already hitting departments hard, I know Queens and TMU have already majorly cut some programs and in some cases they can't find department heads because of lack of budget. Professors don't come cheap anymore.

Also requirements to permanently immigrate to this country are already one of the hardest in the world, you need to come in with a work permit or a study permit to get a chance to get invited for PR.
If isolated to Ontario, yeah that's the case (and no doubt Ford is an absolute disaster of a Premier) but they've exponentially increased in all provinces. Even where they were frozen at by him is an insanely high cost.
 
Nov 2, 2017
6,817
Shibuya
This is good and I'm kind of fed up of the handwringing about tiny percentages of Canadians with more than enough money to take care of themselves who may be affected by this. People affected by this may as well be living on a different planet from people who struggle to get by in Canada.