Canadian Federal Politics Thread v5

[Bonded]

Originally Posted by Looch City

Lol that's on par for Conservatives. They have all the momentum and also the highest potential to absolutely #### the bed. I'm still not convinced that they'll sweep it clean come fall 2025.

If PP runs a bad campaign then a minority is definitely in play which is about the best one can hope for at the moment.

[Winsor_Pilates]

Originally Posted by Harry Lime

Why there shouldn't be opposition to the increase in capital gains tax. Yes, there could be some tweaking done.... but God the income disparity in this country is bad.





https://www.bnnbloomberg.ca/business...-years-report/

Any opposition I saw was on how this will impact average income earners when they sell off an investment property they've held for decades as part of their retirement planning.
People's who's annual incomes are no where near $250,000 and are largely effected by the growing income disparity you've mentioned.

That and the bold faced lie Freeland was making on how this will only effect 0.13% of Canadians with an average income of $1.4M.
We should all be in opposition to politicians insulting our intelligence and lying to us so blatantly.

Perhaps a tweak so people with actual low/modest annual incomes are exempt from the increase and only the upper wealthy are truly targeted?
That would eliminate almost all opposition IMO.

[Cappy]

Originally Posted by Winsor_Pilates

Any opposition I saw was on how this will impact average income earners when they sell off an investment property they've held for decades as part of their retirement planning.
People's who's annual incomes are no where near $250,000 and are largely effected by the growing income disparity you've mentioned.

That and the bold faced lie Freeland was making on how this will only effect 0.13% of Canadians with an average income of $1.4M.
We should all be in opposition to politicians insulting our intelligence and lying to us so blatantly.

Perhaps a tweak so people with actual low/modest annual incomes are exempt from the increase and only the upper wealthy are truly targeted?
That would eliminate almost all opposition IMO.

Sounds like it will lower demand in real estate investment / speculation.

that sounds good

[CliffFletcher]

We need to stop pretending that protecting investments in real estate and making housing more affordable are compatible public policy aims.

[CorsiHockeyLeague]

Originally Posted by CliffFletcher

We need to stop pretending that protecting investments in real estate and making housing more affordable are compatible public policy aims.

Eh, there are ways to do it - i.e., to effectively indemnify current property owners against losses in property value triggered by legislation designed to crater the cost of entry for housing. It would just be extremely complicated and expensive for taxpayers generally... Suppose for example you got a tax credit instead of a capital loss deduction for any loss in value for your primary residence, the amount of which is increased to keep pace with inflation. I'm just making up a random idea but the point is that it's conceivably possible.

[opendoor]

Originally Posted by Winsor_Pilates

Any opposition I saw was on how this will impact average income earners when they sell off an investment property they've held for decades as part of their retirement planning.
People's who's annual incomes are no where near $250,000 and are largely effected by the growing income disparity you've mentioned.

Anyone who has held property for decades was totally fine holding an investment property under a 75% inclusion rate (with no exemption on the first $250K) which was the case until it was lowered in 2000, so why is a 50% inclusion rate somehow treated as sacrosanct?

And beyond that, I'm just not sure the average person is super worried about couples with a $1M gain paying ~$290K in tax now rather than ~$245K in tax under the old inclusion rate. Because you have to earn a very significant gain to even be affected by it, and have to be earning into the millions to increase the tax burden by more than a few percentage points, it's just not a huge difference in reality.

[Winsor_Pilates]

Originally Posted by Cappy

Sounds like it will lower demand in real estate investment / speculation.

that sounds good

Good for who?
Rental supply? Housing starts?
Extrapolate your thought.

[Winsor_Pilates]

Originally Posted by opendoor

Anyone who has held property for decades was totally fine holding an investment property under a 75% inclusion rate (with no exemption on the first $250K) which was the case until it was lowered in 2000, so why is a 50% inclusion rate somehow treated as sacrosanct?

It's 2024, you're talking about a change 24 years ago.
Most people with investment properties now, won't be aware of that or thinking of that. They're going to care that this change has impacted them directly.
You can nitpick at my using "decades" but lets say they bought in 2001 for the sake of eliminating semantics.

And beyond that, I'm just not sure the average person is super worried about couples with a $1M gain paying ~$290K in tax now rather than ~$245K in tax under the old inclusion rate. Because you have to earn a very significant gain to even be affected by it, and have to be earning into the millions to increase the tax burden by more than a few percentage points, it's just not a huge difference in reality.

The couple with that gain IS the average person and they will care.
It may not seem like a big difference to you, but if it's your money it would.

The point is it's misleading to pretend this change only targeted the very wealthy.

[Cappy]

Originally Posted by Winsor_Pilates

Good for who?
Rental supply? Housing starts?
Extrapolate your thought.

Both.

Plus pushing capital to actual productive investments and products.

sounds good

[opendoor]

Originally Posted by Winsor_Pilates

It's 2024, you're talking about a change 24 years ago.
Most people with investment properties now, won't be aware of that or thinking of that. They're going to care that this change has impacted them directly.
You can nitpick at my using "decades" but lets say they bought in 2001 for the sake of eliminating semantics.

The couple with that gain IS the average person and they will care.
It may not seem like a big difference to you, but if it's your money it would.

The point is it's misleading to pretend this change only targeted the very wealthy.

I would argue that the average person doesn't experience a taxable capital gain over $250K (or over $500K for a couple) in a single year. Based on CRA data, only about 40K of the 30 million tax filers have capital gains over that threshold each year, and about half of those are people who do it somewhat regularly (i.e. very wealthy people). And like I said, because the inclusion is done progressively, you have to have a gain well over $250K before the higher rate becomes a significant factor.

Data I've seen suggests that about 1 million filers would be expected to realize that kind of gain in their lifetimes, so that's about 3% of the tax filing population. And that's ignoring the fact that there are ways to avoid going over the threshold (particularly with liquid investments) which would lower that number further. So no, I don't think this is something that's going to really impact the average person.

[PepsiFree]

Originally Posted by Winsor_Pilates

It's 2024, you're talking about a change 24 years ago.
Most people with investment properties now, won't be aware of that or thinking of that. They're going to care that this change has impacted them directly.
You can nitpick at my using "decades" but lets say they bought in 2001 for the sake of eliminating semantics.


The couple with that gain IS the average person and they will care.
It may not seem like a big difference to you, but if it's your money it would.

The point is it's misleading to pretend this change only targeted the very wealthy.

Can you share some data showing the average Canadian realizes a $1M+ real estate gain in their lifetime?

From the data I can find, approximately 65% of Canadians were homeowners in 1999, when the real estate benchmark price was approx. $200k in Canada. It has risen to $800k. So if we assume every homeowner bought in 1999 and has held on to their property, then the average homeowner would see far less than a $1M gain, and the average “Canadian” even lesss.

[PepsiFree]

All in all this seems like a case of “wealthy is anyone who makes more than me.”

If you’re realizing a $1M gain on your home, you’re wealthy. Period. You’re very likely wealthy at a number much lower than that.

[chedder]

Don't forget, it also has to be a capital gain on real estate that isn't your principal residence. So cabin, rental property etc.

Totally agree, if you have a $1 million taxable capital gain, you are wealthy.

[PepsiFree]

Originally Posted by chedder

Don't forget, it also has to be a capital gain on real estate that isn't your principal residence. So cabin, rental property etc.

Totally agree, if you have a $1 million taxable capital gain, you are wealthy.

lol I wasn’t even paying attention, totally missed that.

Imagine trying to frame people with a $1M gain on vacation/investment properties as “the average Canadian.”

Crazy.

[jayswin]

Originally Posted by PepsiFree

lol I wasn’t even paying attention, totally missed that.

Imagine trying to frame people with a $1M gain on vacation/investment properties as “the average Canadian.”

Crazy.

But remember what industry he is in.

[Winsor_Pilates]

Originally Posted by opendoor

I would argue that the average person doesn't experience a taxable capital gain over $250K (or over $500K for a couple) in a single year. Based on CRA data, only about 40K of the 30 million tax filers have capital gains over that threshold each year, and about half of those are people who do it somewhat regularly (i.e. very wealthy people). And like I said, because the inclusion is done progressively, you have to have a gain well over $250K before the higher rate becomes a significant factor.

They are people with average incomes, the gain is not average.
You're smart enough to know the difference.

The original post is talking about "annual income earners over $250,000"; these people aren't that.

A lot of people in markets like Vancouver or Toronto fall into this, as it's not hard to have $250,000+ gains if you've held a property for 10+ years.
The market have escalated substantially enough to make those average people, abnormally large gains.

If you think that makes them very fortunate and they should be subject to the increased tax as the new wealthy, I guess that's a fair position.
But why pretend the tax isn't targeting these people? Why pretend people with AVERAGE INCOMES aren't part of this tax target?

[PepsiFree]

Originally Posted by Winsor_Pilates

They are people with average incomes, the gain is not average.
You're smart enough to know the difference.

The original post is talking about "annual income earners over $250,000"; these people aren't that.

A lot of people in markets like Vancouver or Toronto fall into this, as it's not hard to have $250,000+ gains if you've held a property for 10+ years.
The market have escalated substantially enough to make those average people, abnormally large gains.

If you think that makes them very fortunate and they should be subject to the increased tax as the new wealthy, I guess that's a fair position.
But why pretend the tax isn't targeting these people? Why pretend people with AVERAGE INCOMES aren't part of this tax target?

Because people with AVERAGE INCOMES along with VACATION/INVESTMENT PROPERTIES are WEALTHY

[powderjunkie]

Originally Posted by chedder

Don't forget, it also has to be a capital gain on real estate that isn't your principal residence. So cabin, rental property etc.

Totally agree, if you have a $1 million taxable capital gain, you are wealthy.

This can't be repeated enough. I'm sure there are some fringe cases, but nearly everyone with investment property(s) to be affected by this almost certainly owns a nice primary residence that has appreciated massively.

Originally Posted by Winsor_Pilates

They are people with average incomes, the gain is not average.
You're smart enough to know the difference.

The original post is talking about "annual income earners over $250,000"; these people aren't that.

A lot of people in markets like Vancouver or Toronto fall into this, as it's not hard to have $250,000+ gains if you've held a property for 10+ years.
The market have escalated substantially enough to make those average people, abnormally large gains.

If you think that makes them very fortunate and they should be subject to the increased tax as the new wealthy, I guess that's a fair position.
But why pretend the tax isn't targeting these people? Why pretend people with AVERAGE INCOMES aren't part of this tax target?

My HHI is way above average, but after 5 years of full earnings (and significant debt incurred to achieve that HHI) the notion of an investment feels laughably out of reach (which is fine).

So our annual tax bill is quite a bit higher than these AVERAGE INCOME folks, but we certainly aren't generating the same kind of wealth, because timing.

People often talk about how a 'wealth tax' would be a lot better than than our income tax scheme, because super wealthy people can have shockingly low "incomes". This is an excellent remedy in that direction.

[iggy_oi]

The average income in Canada is around $60k/year, how many vacation and investment properties are those folks buying?

[curves2000]

This tax is going to affect a lot more people than the Liberals think and it will affect their electoral chances as well for a long time. The vacation home market in places like Ontario has taken a large hit, these people live in vote rich Ontario.

The amount of medical professionals who appear to be incensed at this change and looking at options elsewhere is something to watch. When colleagues leave to go south to the US and leave the additional workload and stress on the remaining individuals it exasperates the situation.

There are loads of regular, hard working people and their families who are going to be hit and they are going to be pissed. I don't think the Liberals appreciate how hard this is going to play out in immigrant communities across Canada. Leaving something of value, a generational wealth, a piece of property or a business to your children and grandchildren is engraved in immigrants bones. It cuts deep and the stories are all the same. Immigrant came to Canada with $2, worked their tail off cleaning floors, dishes or other hard manual labour. Sacrificed beyond belief to buy a duplex/4plex/6 plex or a piece of property/strip mall where the family business is located and more. Part of the retirement plan, part of the inheritance, part of keeping the family together and more.

They will then compare to what they would potentially back in the motherland and see it may be 5, 15, 25% etc and it has pissed them off. How much should the government actually make off your retirement and financial planning? Is there a direct correlation between the "rich" paying a lot more in taxes and your average Canadian's rent or mortgage payments becoming a lot more affortable?

Should be interesting how this plays out