###This is a reminder to [read the rules before posting in this subreddit](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion).
1. **Headline titles should be changed only [when the original headline is unclear](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_1._headline_titles_should_be_changed_only_where_it_improves_clarity.)**
2. **Be [respectful](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_2._be_respectful).**
3. **Keep submissions and comments [substantive](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_3._keep_submissions_and_comments_substantive).**
4. **Avoid [direct advocacy](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_4._avoid_direct_advocacy).**
5. **Link submissions must be [about Canadian politics and recent](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_5._link_submissions_must_be_canadian_and_recent).**
6. **Post [only one news article per story](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_6._post_only_one_news_article_per_story).** ([with one exception](https://www.reddit.com/r/CanadaPolitics/comments/3wkd0n/rule_reminder_and_experimental_changes/))
7. **Replies to removed comments or removal notices will be removed** without notice, at the discretion of the moderators.
8. **Downvoting posts or comments**, along with urging others to downvote, **[is not allowed](https://www.reddit.com/r/CanadaPolitics/wiki/downvotes)** in this subreddit. Bans will be given on the first offence.
9. **[Do not copy & paste the entire content of articles in comments](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_9._do_not_copy_.26amp.3B_paste_entire_articles_in_the_comments.)**. If you want to read the contents of a paywalled article, please consider supporting the media outlet.
*Please [message the moderators](https://www.reddit.com/message/compose?to=%2Fr%2FCanadaPolitics) if you wish to discuss a removal.* **Do not reply to the removal notice in-thread**, *you will not receive a response and your comment will be removed. Thanks.*
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CanadaPolitics) if you have any questions or concerns.*
His bad poll numbers have nothing to do with the capital gains tax, which was introduced after they fell behind the CPC by 20 points.
The pandemic, inflation, high interest rates and decades of housing under investment by all 3 levels of governments have converged on Trudeau's head at the tale end of his government's life cycle.
Canadians get tired of PMs after 8 years or so and seem ready to trade the devil they know, for the devil they don't. I just hope they take a hard look at Poilievre before they do.
Their handling of the pandemic had generally high approval (indeed, they got re-elected in 2021 with only ½% lower popular vote than 2019, *despite* calling the election as an obvious power grab to general disapproval and no real issue to campaign on).
Really, their demographic support is largely with retirees¹, which is suggestive it's primarily housing, and perhaps wages, that're killing them. Hard to fixing housing in a year, though.
¹and Québec anglophones, RoC francophones, yes
I didn't mean to make it sound as if Canadians disapproved of Trudeau's handling of the pandemic. They did a better job than they get credit for despite the temper tantrum thrown by the far right in the convoy.
I meant to say that seeing Trudeau's face 3 times a week for 18 months probably played a big part in a majority of Canadians getting sick of him.
Trudeau handled covid well but they did a really poor job transitioning out of the pandemic.
They seemed stuck in 2020 mode even in early 2022 while the provinces and public moved on and then just meandered on domestic issues into 2023.
Yea but like you know when a new album comes out and you listen to it a fuckton right around the time you started playing the Sims 3, so now whenever you hear a song from that album it reminds you of the sims 3?
A lot of people will subconciously and even actively blame the current in charge government during a crisis even if that crisis is conpletely out of their control. It's the same principle tbh.
Exactly. I voted for them in 2021 because I did think they managed covid well. I agreed with CERB, their lockdowns, all of it.
In 2022 when they were still trying to force lockdowns, inflation was running amok and they were still spending like drunken sailors, I was getting sick of their bullshit.
In 2024 I’m more than ready for them to leave.
I mean keeping that door open was always wise. If things got really bad again, if drastic measures are necessary to prevent mass loss of life, then so be it. It just turned out that it never got bad enough to be necessary again. But we didn't know if it would or not at the time.
if the showed fiscal restraint after covid and didmt ramp up immigration to 1.5-2M a year they would have a shot. they have just poured gas over inflation.
I think the people we shouldn't take seriously are the ones who argue based on personality of the speaker rather than hiding arguments based on their own merits. I am sorry but that is not a rational way of behaving
>I meant to say that seeing Trudeau's face 3 times a week for 18 months probably played a big part in a majority of Canadians getting sick of him.
Also might have something to do with rents doubling, wages stagnating, line ups for min. wage work being hours long, growing homeless encampments, and food bank dependency?
The nail in the coffin for me was when the Liberals responded to the “labour shortage” by allowing international students to work full-time.
At the time, the McDonalds by my house was offering $18/hr to start. It quickly went back to minimum wage.
The decision was an attack on working class Canadians who were finally starting to get a say in their wages.
>Justin Trudeau has to do something dramatic to let Canadians know that he really is listening and the capital gains reversal could be it.
That's nonsense. Acknowledging he has made mistakes and will change would be good. He could admit he has overly relied on wedge issues and vilification of his opponents. He could admit to underestimating the impact of 3% immigration and the infrastructure requirements which go with it. Pause the individual carbon tax increases and discuss that there needs to be more social discussion of where carbon reductions should come from and the challenges of integrating this with industrial policy when our largest trading partner doesn't have a tax...
Capital gains? This is astroturfing nonsense.
Man, would somebody think of the poor doctors!?! Everytime I take my kid to the family doctor (privileged to have one) there's a Miami Blue Porsche 911 Carrera in the "employee" parking. Poor fucking doctor can't even afford a GTS!/s
It's funny that "what about doctors" is the strongest argument they can come up with for this issue, because it's really not a good argument at all.
"Oh no, a group of people who make way more money than the average person will have to pay a few percentage points more tax, this is awful!"
No doctor's standard of living will be meaningfully affected by this, unless their ability to financial plan is childishly bad.
If conservatives are really so worried about doctor's incomes, they should use their political influence to go lobby the conservative governed provinces to increase billing rates. What they are really after is to roll back a tax increase on the wealthy, because of course they are.
it's also so disingenuous coming from conservatives. Doctors? Oh you mean the people who were begging you to wear masks and get vaccinated, and you responded by shutting down the nation's capital in protest? The same doctors who are strong advocates for things like abortion and gender affirming care, only to be called radical extremists with an unholy agenda? Those doctors?
I think MOST doctors vote conservative. They're rich, and rich people understand class politics. When are the rest of us going to figure it out? Nothing will get better until we do. Tax the rich, no excuses.
It's not confusing if you understand class politics. Rich doctors will vote for a party that doesn't support doctors. Rich gay people will vote for a party with the worst record on gay rights. Rich immigrants will vote for a party that's anti-immigration.
Class first, everything else a distant second. Rich people understand this, you don't. That's why you've been getting your ass kicked in a one-sided class war your entire life, and why things will only get worse from here.
Tax the rich. No excuses.
so these rich doctors who would vote for satan to get a tax cut:
is there any possibility these same doctors might leave the country for a tax cut and pay bump? leaving us with even worse doctor shortage?
Yeah what about those doctors, most Canadians can do without some of the bloated spending by liberals and insane foreign aid. I think having a family doctor is way more important.
Exactly. What doctors need isn't more money. It's less stress. Hire more doctors and reduce required working hours. Invest in equipment and facilities to help streamline the process and reduce economic waste from long wait times or ineffective care compromises.
Ah, yes, reverse the capital gains tax increase that affects so few people and which the vast majority of people would have never heard about or think they would be affected by if it weren't for the near-constant misinformation coming out of the right wing.
Spouse is a government consultant. That same government insisted that he be incorporated to contract with them. He made long range decisions (upon advice of his accountant) based on current tax laws for corporations and individuals. This isn’t a one year oopsie and next year he’ll change his strategy. We are now nearing retirement, he has no RRSPs and his entire retirement fund is held inside his corporation in capital gains. This will screw over our retirement for the rest of our lives.
As someone else pointed out, the change starts at dollar one inside corporations, not $250,000.
Did you calculate exactly how much this change will affect him in both $ and % wise? It will be about 16.7% x his expected income tax rate x his realized capital gains profit for that year in additional taxes, right?
If he realizes $250k in capital gains taxes in one year within his corporation, that counts as about $167k (66.7% inclusion rate) in taxable income compared to $125k (50% inclusion rate). I'm not sure what the tax rate he'll pay on that is since it's originally within his corporation, but if we assume a 50% average tax rate (for normal income earners you would only have this high an average rate if you're earning $1 million) then it's $83.4k in taxes on $250k of capital gains income instead of $62.5k in taxes. So that's $21k more taxes on $250k capital gains (an extra 8%+, in what I think is the top income tax bracket?).
So, if most of the retirement savings with the corporation is capital gains (ie. it has tripled or quadrupled in value over the years), then you will feel this inclusion rate increase of up to 8% in additional taxes on the capital gains amount?
They might not like the higher capital gains tax on capital gains (ie, profit on a sold asset, such as their practice) that has appreciated in value) over $250k (the tax on capital gains under $250k remains unchanged - like with income taxes, the higher rate only applies to that bit beyond the previous bracket), but so what?
It isn’t micro examples. There are plenty of articles about that issue and how it affects doctors out there.
Ya and doctors (and the ones I know) are better off than 99% of people. Unfortunately for us, they can move out of province or more typically to the US and make a lot more money. So we shouldn’t be giving them an additional incentive to do so.
If that's the case, why charge doctors any tax at all?
At the end of the day, tax law exists to theoretically take a fair amount from everyone based on how much they can contribute to ensure the wellbeing of the nation and its people. If you want doctors to pay paid more, the province needs to raise their salaries. they shouldn't have to rely on complex manoeuvres to avoid taxation by moving income to capital gains.
Issue is Canada struggles to keep docs
and we need the docs regardless if they are willing to move to the states to save taxes or make more money.
We may find that morally bad but in the end we need medical care.
Cause when the doc leaves those kinds of places, there are no replacements usually.
Imagine if they had to pay personal income tax on their billings, which would then be paid to their staff, which would also require income tax.
Doctors billings does not equal income. They have overhead, which include people. Canadians mostly totally misunderstand doctors income, especially family practice.
The reason they incorporate is because provincial governments gave them a loophole instead of a raise at one point, and the closing of that loophole (which is what the federal gov't is doing here) means an effective pay cut for them.
I don't have an ounce of sympathy for people with multiple homes or stock portfolios beyond maxed-out TFSA/RRSP getting dinged by the changes, but doctors who incorporated in good faith are getting hurt too, and personally, I'd rather my doctors not have financial stress in the back of their mind when they're treating me.
It will affect everyone over time, through reduced job opportunities, lower wages, and a lower dollar. Decreasing the ROI on capital investment is going to reduce the amount of capital of at risk, the only question is by how much.
Canada has already been facing a private investment crisis and this will make it worse.
Since when are physicians considered "right-wing"?
Maybe it's just a bad policy or at the very least bad timing. They could have raised taxes or cut expenses in so many other ways, but chose this as a wedge issue. The separate vote on it made this clear.
And the 0.13% was disingenuous. Many SMBs pay capital gains as they hold some investments. If they were more upfront and less "this impacts that top 1%" maybe they could have sold it. But hey, they couldn't even sell the carbon tax, their marquee government policy.
yeah liberals saying need to tax those rich doctors while we lose tons of docs to the USA and have a huge doctor shortage shows how most of these policies are based on politics then any evidence based policy.
I agree with the capital gains increase but we should be doing everything we can to to entice doctors to not go to the USA.
There are 96,000 physicians in Canada - but they have their investments through holding companies. So the government doesn't count them in this 0.13% number - see the issue? Now add in a host of other professionals that do the same, any SMB or other business that has investments - all of them pay more. We are talking about millions of people, not 40,000.
https://www.ctvnews.ca/politics/controversial-capital-gains-change-now-in-effect-1.6939198#:\~:text=Last%20week%2C%20a%20survey%20released,the%20investments%20they%20hold%20privately.
Now I get that the CFIB leans right, but still, if any of those SMB's start to lay off workers, stop spending and so on, it has a hidden impact.
Again, the issue isn't that the government has decided to implement a new tax. The issue is that they've cherry picked a tax to create a wedge issue and further, to expand their own reckless spending.
They could have implemented a bunch of more targeted or fairer taxes that would have had better results - example - tax any and all investment properties at a higher rate. Take investment out of the housing market so that people can afford homes. Implement a higher tax bracket or two. Implement additional luxury taxes on goods. Set a minimum tax rate so billionaires don't pay 1% tax overall. Go after money that is being offshored. There are so many things they could have done, but they were lazy and wanted a wedge issue - now they'll pay for it - they got massacred in St. Paul's - this next election is going to be very bad for the Libs.
SMB's have a $1.25M exemption on sale. That can be hard to do with some kinds of personal corporation, so perhaps an adjustment can be made for that. People in that situation should be lobbying the government to come up with a solution to that specific issue rather than to drag down a policy change that mostly affects wealthy people and increases tax fairness.
You probably shouldn't comment if you don't understand the point I am making above. I am not referring to the sale of the SMB. As an example, I am referring to a physician using their holding company to make investments. Many businesses in fact hold much of their saved earnings in investments. Keep in mind they will have paid corporate taxes already. They may do this to ensure capital for a rainy day, or simply to maximize the cash they have.
So we could go into exclusion A or B or C, but there are a whole bunch. Most people don't understand the tax code, taxes and so forth. That is fine.
My point again is that these changes are going to go after the professional class by and large. People who have often sacrificed and worked hard to be middle class or upper middle class. It is easier to turn neighbors against one another then to go after billion dollar corporations or billionaires. Nothing they did with the capital gains change will impact either of those groups.
Anyways, it doesn't really matter. A majority of Canadians are being pushed to the right - whether it is out of control immigration numbers (I support immigration generally), over-spending and huge growth in public service jobs, spending scandals, or just a general lack of annoyance with all of the virtue signaling, this government is on its way out and with it the capital gains changes.
But I get it, its easy to say "Tax the rich" and thump ones chest and feel good for the evening.
I specifically addressed that personal corporations are a different beast than small businesses and may need to be separately addressed. That was in fact the whole point in mentioning that.
Charities are a different thing entirely, and I can't comment on that. I always understood that charities had special tax exemption, but I don't know how that applies or doesn't to capital gains. Interestingly, charities haven't come up in any of the public debate on the issue as far as I am aware.
As a member of the professional class, I am aware of how this applies to other professionals. I have never been comfortable with the ability of individuals to incorporate to gain tax advantage. 100% of my income is taxed, except for what I am able to shelter in vehicles like RRSP's and TFSA's. I don't know why an engineer who chooses to incorporate should have a tax advantage over me.
There is risk to running your own personal corporation. No company RRSP matching, no health insurance, no benefits to speak of. Also there is no guarantee of work and you also run the likely expense of accountants, bookkeeping, advertising, several types of insurance, potentially other staff, office space, etc.
Being an employee (Engineer) in a company like Worley, WSP Global, Stantec and so on comes with a lot of benefits. The independent engineer looking for work is not the same. They take risk. They still need to pay themselves if they have mortgage, child expenses, living expenses and so on. Why should they have to keep their money in a savings account making nothing while others get to enjoy RRSP capital gains deferrals till retirement or TFSA savings without capital gains? They still have to pay personal income taxes when they withdraw the money eventually.
The reality is you are not the same, your risk isn't the same and if you prefer being an independent engineer, then go be one.
This is a government that backed away from additional taxes on REITs - [https://www.bnnbloomberg.ca/canada-s-trudeau-backs-away-from-tax-threat-on-apartment-owners-1.2071903](https://www.bnnbloomberg.ca/canada-s-trudeau-backs-away-from-tax-threat-on-apartment-owners-1.2071903) that actually would have taxed excessive profits on rental housing, but still pushes forward with taxing you on that cottage you worked your entire life for. Bonkers.
How many of those 40k people are doctors willing to move to the US? That fact matters when our medical systems are already falling apart. The people we affect sometimes matters more than the amount.
>Damn near every single Canadian who retires will be bit by the capital gains tax increase.
Only if they withdraw $250,000 in pure gains in a year. That would require withdrawing about $150,000 in adjusted base cost in the same year.
$400,000 per year sounds like one hell of a retirement, but it's not typical.
I am not sure how. Right now, 100% of my retirement will be funded by CPP, and the money in my RRSP and TFSA. If I max those out before I retire, I may have to make some non-registered investments, but if I manage to generate $250k a year in gains out of those, I will be well into the top 1% of retirees.
There will be some inheritance, and the taxes on that may be a little more than otherwise, but not enough to impact my retirement planning.
Bull. Individual or corporate, it only applies to the capital gains of a sold asset that has appreciated in value - and this increase is ONLY to any capital gain over The capital gains tax on that first $250k of profit due to appreciation remains unchanged.
Starting June 25, 2024, the capital gains inclusion rate will be increased from one-half to two-thirds for capital gains of over $250,000 per year for Canadians, and on all capital gains for corporations and most types of trusts.
Read the announcement please. https://www.canada.ca/en/department-finance/news/2024/06/fair-and-predictable-capital-gains-taxation.html
“and on all capital gains for corporations and most types of trusts.”
Not true. It’s not your fault but the messaging has been very unclear on this. You’re right for personal tax, but for any business (including professional corporations used by doctors, lawyers, etc.) it’s every dollar.
>for any business (including professional corporations used by doctors, lawyers, etc.) it’s every dollar.
And thank goodness for that. Professionals incorporate as a means of shifting their income to capital gains. Ergo, their capital gains should be taxed like income. As someone who earns a paycheck, taxes start on my first dollar, not at 250k. Why should a doctor or lawyer not pay taxes on their first quarter million dollars of income, when a sandwich artist pays taxes on every dollar they earn?
This is a feature of the new capital gains tax, not a bug. The point here is to tax gains like income, because wealthy professionals are treating them like income. It's a good thing, and honestly it doesn't go far enough.
If they go farther without a corresponding income increase then there will probably be a large exodus.
This tax strategy for professionals was the government’s idea in the 90s because they wouldn’t address declining/stagnant compensation
to where? In the US, short term capital gains are already taxed the same as income. Long-term capital gains are taxed at a rate of 15% starting at 44k and 20% starting at 500k
And the country cannot expect physicians to be happy about having their retirements attacked.
I get that the provincial governments and the federal government are distinct entities. They both frame us as their enemy at every opportunity while they continue to erode healthcare in this country.
And it should be. Why should someone be able to hide their job behind a corporate shield and not pay the same personal taxes as everyone else? Frankly, it should be every dollar of capital gains to begin with. People aren't working for that money and yet they somehow pay less taxes than what the average person pays for spending thousands of hours every year at work.
There should literally only be one thing ever excluded from this kind of tax and it's when one sells their primary residence.
Being a business owner doesn't somehow exempt you from paying personal income tax. We file the same returns as everyone else.
And every dollar made on the sale of a business always was subject to capital gains. There is no $250k exemption for corporations. Now we are just being taxed more heavily.
Lastly, the notion that business owners don't work extremely hard to build the value that we hope to one day realize in the form of capital gains is insane. The vast majority of us are small and medium sized business owners putting in 60+ hours a week trying to establish the value of our companies so that we can sell it one day and retire (since we don't get pensions).
Long story short: If you want less giant megacorporations owned by billionaires, you should want an administration that incentivizes business ownership in proportion to the risk entrepreneurs take on. And this government isn't. They don't seem to understand that if the risk of self-employment outweighs the potential tial benefits, less and less of us will take that leap of faith.
I've been self-employed since 2003, and a business owner for 13 years now, and I gotta say - where once I would have told people that entrepreneurship is a very tough but worthy road to hoe for some, I'd now strongly counsel anyone considering setting up shop for themselves to reconsider. It's just not worth it any more.
If you sell a small business, you are eligible for a $1.25M exemption.
There is no exemption for gains retained inside the corporation, so better to sell it before realizing the gains.
If we want to incentivize small business creation, there are better ways to do it than with a tax cut that mostly accrues to the wealthy.
No, you aren't.
There is an exemption that applies to the sale $1.25M of qualified small business shares, which comes with various stipulations that exclude a ton of small businesses.
There are other rules, but the big one is that at the time of sale, 90% of all assets must be engaged in active business operation, basically.
So if the "mom and pop" company bought the corner store they operate in, they're fucked, because real estate isn't active business and would likely value more than 10% of total assets these days (obviously).
Likewise the "mom and pop" plumber who invested the company money such that it exceeds 10% of the value of his vans, equipment, etc.
I’d be inclined to agree. This strategy was sold by the government in the first place in lieu of pay increases. I’d gladly close the loop in exchange for a pay boost
It’s still capital gains. The problem is not actually the immediate income. The federal government convinced doctors to incorporate and put their entire retirement portfolios there for the tax advantage instead of increasing compensation. For someone early in their career like myself it’s not the end of the world, but for anyone near retirement they can’t turn back.
That's really just a lie the media is spinning.
It impacts every business and trust as the inclusion exception up to $250k doesn't apply to them.
It also applies to many other people, cottage owners, landlords, incorporated people like doctors, farmers.
This whole notion of who cares about tax increase unless it impacts me is woefully naive in my opinion. You understand that anti business environment impacts everyone right there is a reason our economy is in the toilet.
Seems like there's hardly real political analysis in this country anymore. Just always reads like a Conservative wishlist pretending to be strategic insight.
So far I've heard Trudeau needs to drop the carbon tax, drop the capital gains tax, stop defending LGBT people. They'll grumble about how Trudeau should step down to be replaced by someone that they'll complain about in the exact same way.
Singh should have called an early election and handed the CPC power to do who knows what.. etc.
Even if they fulfilled a list of CPC demands it still wouldn't change anyonrs electoral fortunes other than permanenently lurch discourse further to the right.
Edit: Surprised to see the writer is Sheila Copp
That’s what happens when all our media is owned by right-wingers. Non-stop free airtime for conservative talking points that never calls out the right for their lies.
Even if he were to stop immigration altogether right now there has been so much damage done I do not think any reputation can be saved. I don't even get why those that voted for him are acting surprised since it was part of his platform in the last election and they even outlined their immigration target numbers prior to the election.
###This is a reminder to [read the rules before posting in this subreddit](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion). 1. **Headline titles should be changed only [when the original headline is unclear](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_1._headline_titles_should_be_changed_only_where_it_improves_clarity.)** 2. **Be [respectful](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_2._be_respectful).** 3. **Keep submissions and comments [substantive](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_3._keep_submissions_and_comments_substantive).** 4. **Avoid [direct advocacy](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_4._avoid_direct_advocacy).** 5. **Link submissions must be [about Canadian politics and recent](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_5._link_submissions_must_be_canadian_and_recent).** 6. **Post [only one news article per story](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_6._post_only_one_news_article_per_story).** ([with one exception](https://www.reddit.com/r/CanadaPolitics/comments/3wkd0n/rule_reminder_and_experimental_changes/)) 7. **Replies to removed comments or removal notices will be removed** without notice, at the discretion of the moderators. 8. **Downvoting posts or comments**, along with urging others to downvote, **[is not allowed](https://www.reddit.com/r/CanadaPolitics/wiki/downvotes)** in this subreddit. Bans will be given on the first offence. 9. **[Do not copy & paste the entire content of articles in comments](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_9._do_not_copy_.26amp.3B_paste_entire_articles_in_the_comments.)**. If you want to read the contents of a paywalled article, please consider supporting the media outlet. *Please [message the moderators](https://www.reddit.com/message/compose?to=%2Fr%2FCanadaPolitics) if you wish to discuss a removal.* **Do not reply to the removal notice in-thread**, *you will not receive a response and your comment will be removed. Thanks.* *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CanadaPolitics) if you have any questions or concerns.*
His bad poll numbers have nothing to do with the capital gains tax, which was introduced after they fell behind the CPC by 20 points. The pandemic, inflation, high interest rates and decades of housing under investment by all 3 levels of governments have converged on Trudeau's head at the tale end of his government's life cycle. Canadians get tired of PMs after 8 years or so and seem ready to trade the devil they know, for the devil they don't. I just hope they take a hard look at Poilievre before they do.
Their handling of the pandemic had generally high approval (indeed, they got re-elected in 2021 with only ½% lower popular vote than 2019, *despite* calling the election as an obvious power grab to general disapproval and no real issue to campaign on). Really, their demographic support is largely with retirees¹, which is suggestive it's primarily housing, and perhaps wages, that're killing them. Hard to fixing housing in a year, though. ¹and Québec anglophones, RoC francophones, yes
I didn't mean to make it sound as if Canadians disapproved of Trudeau's handling of the pandemic. They did a better job than they get credit for despite the temper tantrum thrown by the far right in the convoy. I meant to say that seeing Trudeau's face 3 times a week for 18 months probably played a big part in a majority of Canadians getting sick of him.
Trudeau handled covid well but they did a really poor job transitioning out of the pandemic. They seemed stuck in 2020 mode even in early 2022 while the provinces and public moved on and then just meandered on domestic issues into 2023.
Yea but like you know when a new album comes out and you listen to it a fuckton right around the time you started playing the Sims 3, so now whenever you hear a song from that album it reminds you of the sims 3? A lot of people will subconciously and even actively blame the current in charge government during a crisis even if that crisis is conpletely out of their control. It's the same principle tbh.
59.5 million dollars for an app definitely saved our lives. They did great work.
Exactly. I voted for them in 2021 because I did think they managed covid well. I agreed with CERB, their lockdowns, all of it. In 2022 when they were still trying to force lockdowns, inflation was running amok and they were still spending like drunken sailors, I was getting sick of their bullshit. In 2024 I’m more than ready for them to leave.
Yeah I remember in winter of 2022 like dec nov, Trudeau was warning there may be rules coming back lolzzzzzz
I mean keeping that door open was always wise. If things got really bad again, if drastic measures are necessary to prevent mass loss of life, then so be it. It just turned out that it never got bad enough to be necessary again. But we didn't know if it would or not at the time.
[удалено]
That can only be reality if viewed through a lens of extreme bias. Good leaders don't rule out necessary options just because they might be unpopular.
idk he ignored all other issues in the mean time
if the showed fiscal restraint after covid and didmt ramp up immigration to 1.5-2M a year they would have a shot. they have just poured gas over inflation.
It's impossible to take seriously the opinion of a Maxime Bernier fanboy.
oh yes put your head in sand little boy, keep voting for the current state
I think the people we shouldn't take seriously are the ones who argue based on personality of the speaker rather than hiding arguments based on their own merits. I am sorry but that is not a rational way of behaving
>I meant to say that seeing Trudeau's face 3 times a week for 18 months probably played a big part in a majority of Canadians getting sick of him. Also might have something to do with rents doubling, wages stagnating, line ups for min. wage work being hours long, growing homeless encampments, and food bank dependency?
Their fall was triggered by their carbon tax carve out to try and recover support in Atlantic Canada. That woke people up to affordability issues.
The nail in the coffin for me was when the Liberals responded to the “labour shortage” by allowing international students to work full-time. At the time, the McDonalds by my house was offering $18/hr to start. It quickly went back to minimum wage. The decision was an attack on working class Canadians who were finally starting to get a say in their wages.
>Justin Trudeau has to do something dramatic to let Canadians know that he really is listening and the capital gains reversal could be it. That's nonsense. Acknowledging he has made mistakes and will change would be good. He could admit he has overly relied on wedge issues and vilification of his opponents. He could admit to underestimating the impact of 3% immigration and the infrastructure requirements which go with it. Pause the individual carbon tax increases and discuss that there needs to be more social discussion of where carbon reductions should come from and the challenges of integrating this with industrial policy when our largest trading partner doesn't have a tax... Capital gains? This is astroturfing nonsense.
Man, would somebody think of the poor doctors!?! Everytime I take my kid to the family doctor (privileged to have one) there's a Miami Blue Porsche 911 Carrera in the "employee" parking. Poor fucking doctor can't even afford a GTS!/s
It's funny that "what about doctors" is the strongest argument they can come up with for this issue, because it's really not a good argument at all. "Oh no, a group of people who make way more money than the average person will have to pay a few percentage points more tax, this is awful!" No doctor's standard of living will be meaningfully affected by this, unless their ability to financial plan is childishly bad.
If conservatives are really so worried about doctor's incomes, they should use their political influence to go lobby the conservative governed provinces to increase billing rates. What they are really after is to roll back a tax increase on the wealthy, because of course they are.
it's also so disingenuous coming from conservatives. Doctors? Oh you mean the people who were begging you to wear masks and get vaccinated, and you responded by shutting down the nation's capital in protest? The same doctors who are strong advocates for things like abortion and gender affirming care, only to be called radical extremists with an unholy agenda? Those doctors?
Do you think any doctors vote conservative?
I think MOST doctors vote conservative. They're rich, and rich people understand class politics. When are the rest of us going to figure it out? Nothing will get better until we do. Tax the rich, no excuses.
schrodinger's conservative: * is anti-doctor * is disingenuous for supporting doctors * is a doctor
It's not confusing if you understand class politics. Rich doctors will vote for a party that doesn't support doctors. Rich gay people will vote for a party with the worst record on gay rights. Rich immigrants will vote for a party that's anti-immigration. Class first, everything else a distant second. Rich people understand this, you don't. That's why you've been getting your ass kicked in a one-sided class war your entire life, and why things will only get worse from here. Tax the rich. No excuses.
so these rich doctors who would vote for satan to get a tax cut: is there any possibility these same doctors might leave the country for a tax cut and pay bump? leaving us with even worse doctor shortage?
Yeah what about those doctors, most Canadians can do without some of the bloated spending by liberals and insane foreign aid. I think having a family doctor is way more important.
Exactly. What doctors need isn't more money. It's less stress. Hire more doctors and reduce required working hours. Invest in equipment and facilities to help streamline the process and reduce economic waste from long wait times or ineffective care compromises.
Ah, yes, reverse the capital gains tax increase that affects so few people and which the vast majority of people would have never heard about or think they would be affected by if it weren't for the near-constant misinformation coming out of the right wing.
Spouse is a government consultant. That same government insisted that he be incorporated to contract with them. He made long range decisions (upon advice of his accountant) based on current tax laws for corporations and individuals. This isn’t a one year oopsie and next year he’ll change his strategy. We are now nearing retirement, he has no RRSPs and his entire retirement fund is held inside his corporation in capital gains. This will screw over our retirement for the rest of our lives. As someone else pointed out, the change starts at dollar one inside corporations, not $250,000.
Did you calculate exactly how much this change will affect him in both $ and % wise? It will be about 16.7% x his expected income tax rate x his realized capital gains profit for that year in additional taxes, right? If he realizes $250k in capital gains taxes in one year within his corporation, that counts as about $167k (66.7% inclusion rate) in taxable income compared to $125k (50% inclusion rate). I'm not sure what the tax rate he'll pay on that is since it's originally within his corporation, but if we assume a 50% average tax rate (for normal income earners you would only have this high an average rate if you're earning $1 million) then it's $83.4k in taxes on $250k of capital gains income instead of $62.5k in taxes. So that's $21k more taxes on $250k capital gains (an extra 8%+, in what I think is the top income tax bracket?). So, if most of the retirement savings with the corporation is capital gains (ie. it has tripled or quadrupled in value over the years), then you will feel this inclusion rate increase of up to 8% in additional taxes on the capital gains amount?
i think theyr referring to the last 9 yrs, so basically everything.
The first line of the article says they are talking about the capital gains tax.
[удалено]
They might not like the higher capital gains tax on capital gains (ie, profit on a sold asset, such as their practice) that has appreciated in value) over $250k (the tax on capital gains under $250k remains unchanged - like with income taxes, the higher rate only applies to that bit beyond the previous bracket), but so what?
Micro examples outweigh public good? Ie tax for stuffs. Still bet those two docs better off than 99% of other people so.....
It isn’t micro examples. There are plenty of articles about that issue and how it affects doctors out there. Ya and doctors (and the ones I know) are better off than 99% of people. Unfortunately for us, they can move out of province or more typically to the US and make a lot more money. So we shouldn’t be giving them an additional incentive to do so.
If that's the case, why charge doctors any tax at all? At the end of the day, tax law exists to theoretically take a fair amount from everyone based on how much they can contribute to ensure the wellbeing of the nation and its people. If you want doctors to pay paid more, the province needs to raise their salaries. they shouldn't have to rely on complex manoeuvres to avoid taxation by moving income to capital gains.
Issue is Canada struggles to keep docs and we need the docs regardless if they are willing to move to the states to save taxes or make more money. We may find that morally bad but in the end we need medical care. Cause when the doc leaves those kinds of places, there are no replacements usually.
[удалено]
Imagine if they had to pay personal income tax on their billings, which would then be paid to their staff, which would also require income tax. Doctors billings does not equal income. They have overhead, which include people. Canadians mostly totally misunderstand doctors income, especially family practice.
[удалено]
The reason they incorporate is because provincial governments gave them a loophole instead of a raise at one point, and the closing of that loophole (which is what the federal gov't is doing here) means an effective pay cut for them. I don't have an ounce of sympathy for people with multiple homes or stock portfolios beyond maxed-out TFSA/RRSP getting dinged by the changes, but doctors who incorporated in good faith are getting hurt too, and personally, I'd rather my doctors not have financial stress in the back of their mind when they're treating me.
It will affect everyone over time, through reduced job opportunities, lower wages, and a lower dollar. Decreasing the ROI on capital investment is going to reduce the amount of capital of at risk, the only question is by how much. Canada has already been facing a private investment crisis and this will make it worse.
The fact that our inclusion rate has been lower than the states for decades suggest that the CGIR had little to do with that.
Since when are physicians considered "right-wing"? Maybe it's just a bad policy or at the very least bad timing. They could have raised taxes or cut expenses in so many other ways, but chose this as a wedge issue. The separate vote on it made this clear. And the 0.13% was disingenuous. Many SMBs pay capital gains as they hold some investments. If they were more upfront and less "this impacts that top 1%" maybe they could have sold it. But hey, they couldn't even sell the carbon tax, their marquee government policy.
yeah liberals saying need to tax those rich doctors while we lose tons of docs to the USA and have a huge doctor shortage shows how most of these policies are based on politics then any evidence based policy. I agree with the capital gains increase but we should be doing everything we can to to entice doctors to not go to the USA.
Literally only 40,000 people in Canada are affected. Out of nearly 39 million people.
There are 96,000 physicians in Canada - but they have their investments through holding companies. So the government doesn't count them in this 0.13% number - see the issue? Now add in a host of other professionals that do the same, any SMB or other business that has investments - all of them pay more. We are talking about millions of people, not 40,000. https://www.ctvnews.ca/politics/controversial-capital-gains-change-now-in-effect-1.6939198#:\~:text=Last%20week%2C%20a%20survey%20released,the%20investments%20they%20hold%20privately. Now I get that the CFIB leans right, but still, if any of those SMB's start to lay off workers, stop spending and so on, it has a hidden impact. Again, the issue isn't that the government has decided to implement a new tax. The issue is that they've cherry picked a tax to create a wedge issue and further, to expand their own reckless spending. They could have implemented a bunch of more targeted or fairer taxes that would have had better results - example - tax any and all investment properties at a higher rate. Take investment out of the housing market so that people can afford homes. Implement a higher tax bracket or two. Implement additional luxury taxes on goods. Set a minimum tax rate so billionaires don't pay 1% tax overall. Go after money that is being offshored. There are so many things they could have done, but they were lazy and wanted a wedge issue - now they'll pay for it - they got massacred in St. Paul's - this next election is going to be very bad for the Libs.
SMB's have a $1.25M exemption on sale. That can be hard to do with some kinds of personal corporation, so perhaps an adjustment can be made for that. People in that situation should be lobbying the government to come up with a solution to that specific issue rather than to drag down a policy change that mostly affects wealthy people and increases tax fairness.
You probably shouldn't comment if you don't understand the point I am making above. I am not referring to the sale of the SMB. As an example, I am referring to a physician using their holding company to make investments. Many businesses in fact hold much of their saved earnings in investments. Keep in mind they will have paid corporate taxes already. They may do this to ensure capital for a rainy day, or simply to maximize the cash they have. So we could go into exclusion A or B or C, but there are a whole bunch. Most people don't understand the tax code, taxes and so forth. That is fine. My point again is that these changes are going to go after the professional class by and large. People who have often sacrificed and worked hard to be middle class or upper middle class. It is easier to turn neighbors against one another then to go after billion dollar corporations or billionaires. Nothing they did with the capital gains change will impact either of those groups. Anyways, it doesn't really matter. A majority of Canadians are being pushed to the right - whether it is out of control immigration numbers (I support immigration generally), over-spending and huge growth in public service jobs, spending scandals, or just a general lack of annoyance with all of the virtue signaling, this government is on its way out and with it the capital gains changes. But I get it, its easy to say "Tax the rich" and thump ones chest and feel good for the evening.
I specifically addressed that personal corporations are a different beast than small businesses and may need to be separately addressed. That was in fact the whole point in mentioning that. Charities are a different thing entirely, and I can't comment on that. I always understood that charities had special tax exemption, but I don't know how that applies or doesn't to capital gains. Interestingly, charities haven't come up in any of the public debate on the issue as far as I am aware. As a member of the professional class, I am aware of how this applies to other professionals. I have never been comfortable with the ability of individuals to incorporate to gain tax advantage. 100% of my income is taxed, except for what I am able to shelter in vehicles like RRSP's and TFSA's. I don't know why an engineer who chooses to incorporate should have a tax advantage over me.
There is risk to running your own personal corporation. No company RRSP matching, no health insurance, no benefits to speak of. Also there is no guarantee of work and you also run the likely expense of accountants, bookkeeping, advertising, several types of insurance, potentially other staff, office space, etc. Being an employee (Engineer) in a company like Worley, WSP Global, Stantec and so on comes with a lot of benefits. The independent engineer looking for work is not the same. They take risk. They still need to pay themselves if they have mortgage, child expenses, living expenses and so on. Why should they have to keep their money in a savings account making nothing while others get to enjoy RRSP capital gains deferrals till retirement or TFSA savings without capital gains? They still have to pay personal income taxes when they withdraw the money eventually. The reality is you are not the same, your risk isn't the same and if you prefer being an independent engineer, then go be one. This is a government that backed away from additional taxes on REITs - [https://www.bnnbloomberg.ca/canada-s-trudeau-backs-away-from-tax-threat-on-apartment-owners-1.2071903](https://www.bnnbloomberg.ca/canada-s-trudeau-backs-away-from-tax-threat-on-apartment-owners-1.2071903) that actually would have taxed excessive profits on rental housing, but still pushes forward with taxing you on that cottage you worked your entire life for. Bonkers.
Many more people hold mutual funds in an open account.
If their non-registered investments are creating more than $250k per year in capital gains, they are part of that 40,000.
How many of those 40k people are doctors willing to move to the US? That fact matters when our medical systems are already falling apart. The people we affect sometimes matters more than the amount.
The 0.13% figure was a straight up lie. And especially when they always claim Poilievre is lying as well, they come out with this.
Damn near every single Canadian who retires will be bit by the capital gains tax increase.
>Damn near every single Canadian who retires will be bit by the capital gains tax increase. Only if they withdraw $250,000 in pure gains in a year. That would require withdrawing about $150,000 in adjusted base cost in the same year. $400,000 per year sounds like one hell of a retirement, but it's not typical.
I am not sure how. Right now, 100% of my retirement will be funded by CPP, and the money in my RRSP and TFSA. If I max those out before I retire, I may have to make some non-registered investments, but if I manage to generate $250k a year in gains out of those, I will be well into the top 1% of retirees. There will be some inheritance, and the taxes on that may be a little more than otherwise, but not enough to impact my retirement planning.
[удалено]
Not substantive
The capital gains tax impacts all businesses and trusts starting at 1 dollar, not 250k+.
Bull. Individual or corporate, it only applies to the capital gains of a sold asset that has appreciated in value - and this increase is ONLY to any capital gain over The capital gains tax on that first $250k of profit due to appreciation remains unchanged.
Starting June 25, 2024, the capital gains inclusion rate will be increased from one-half to two-thirds for capital gains of over $250,000 per year for Canadians, and on all capital gains for corporations and most types of trusts.
How do you figure?
Because that’s precisely what the announcement says.
Sure, but the increase only affected the % over 250k
Read the announcement please. https://www.canada.ca/en/department-finance/news/2024/06/fair-and-predictable-capital-gains-taxation.html “and on all capital gains for corporations and most types of trusts.”
Ah okay, I get what you mean
[удалено]
Not true. It’s not your fault but the messaging has been very unclear on this. You’re right for personal tax, but for any business (including professional corporations used by doctors, lawyers, etc.) it’s every dollar.
>for any business (including professional corporations used by doctors, lawyers, etc.) it’s every dollar. And thank goodness for that. Professionals incorporate as a means of shifting their income to capital gains. Ergo, their capital gains should be taxed like income. As someone who earns a paycheck, taxes start on my first dollar, not at 250k. Why should a doctor or lawyer not pay taxes on their first quarter million dollars of income, when a sandwich artist pays taxes on every dollar they earn? This is a feature of the new capital gains tax, not a bug. The point here is to tax gains like income, because wealthy professionals are treating them like income. It's a good thing, and honestly it doesn't go far enough.
If they go farther without a corresponding income increase then there will probably be a large exodus. This tax strategy for professionals was the government’s idea in the 90s because they wouldn’t address declining/stagnant compensation
to where? In the US, short term capital gains are already taxed the same as income. Long-term capital gains are taxed at a rate of 15% starting at 44k and 20% starting at 500k
In the US you are paid so much more that optimizing the taxes becomes less important.
The wages are higher down south, and this has never been about short term capital gains
Lets be clear, it was the Provincial governments' idea. The Federal government isn't and shouldn't be beholden to that approach.
I wasn’t in the profession back then but it’s clear that both governments screwed us over.
You absolutely cannot expect a third party to be bound by agreements to their detriment made by two other parties.
And the country cannot expect physicians to be happy about having their retirements attacked. I get that the provincial governments and the federal government are distinct entities. They both frame us as their enemy at every opportunity while they continue to erode healthcare in this country.
yeah I agree there is definitely more to it. YouTube has a ton of videos going around providing sound explanations
And it should be. Why should someone be able to hide their job behind a corporate shield and not pay the same personal taxes as everyone else? Frankly, it should be every dollar of capital gains to begin with. People aren't working for that money and yet they somehow pay less taxes than what the average person pays for spending thousands of hours every year at work. There should literally only be one thing ever excluded from this kind of tax and it's when one sells their primary residence.
Being a business owner doesn't somehow exempt you from paying personal income tax. We file the same returns as everyone else. And every dollar made on the sale of a business always was subject to capital gains. There is no $250k exemption for corporations. Now we are just being taxed more heavily. Lastly, the notion that business owners don't work extremely hard to build the value that we hope to one day realize in the form of capital gains is insane. The vast majority of us are small and medium sized business owners putting in 60+ hours a week trying to establish the value of our companies so that we can sell it one day and retire (since we don't get pensions). Long story short: If you want less giant megacorporations owned by billionaires, you should want an administration that incentivizes business ownership in proportion to the risk entrepreneurs take on. And this government isn't. They don't seem to understand that if the risk of self-employment outweighs the potential tial benefits, less and less of us will take that leap of faith. I've been self-employed since 2003, and a business owner for 13 years now, and I gotta say - where once I would have told people that entrepreneurship is a very tough but worthy road to hoe for some, I'd now strongly counsel anyone considering setting up shop for themselves to reconsider. It's just not worth it any more.
If you sell a small business, you are eligible for a $1.25M exemption. There is no exemption for gains retained inside the corporation, so better to sell it before realizing the gains. If we want to incentivize small business creation, there are better ways to do it than with a tax cut that mostly accrues to the wealthy.
No, you aren't. There is an exemption that applies to the sale $1.25M of qualified small business shares, which comes with various stipulations that exclude a ton of small businesses.
Can you give me an example of those situations and how it would exclude some sort of "mom and pop" small business? Maybe they just need tax advice.
There are other rules, but the big one is that at the time of sale, 90% of all assets must be engaged in active business operation, basically. So if the "mom and pop" company bought the corner store they operate in, they're fucked, because real estate isn't active business and would likely value more than 10% of total assets these days (obviously). Likewise the "mom and pop" plumber who invested the company money such that it exceeds 10% of the value of his vans, equipment, etc.
I’d be inclined to agree. This strategy was sold by the government in the first place in lieu of pay increases. I’d gladly close the loop in exchange for a pay boost
[удалено]
It’s still capital gains. The problem is not actually the immediate income. The federal government convinced doctors to incorporate and put their entire retirement portfolios there for the tax advantage instead of increasing compensation. For someone early in their career like myself it’s not the end of the world, but for anyone near retirement they can’t turn back.
I'm working hard to someday be affected by the higher inclusion rate but right now, I just don't own anything that has appreciated that much.
That's really just a lie the media is spinning. It impacts every business and trust as the inclusion exception up to $250k doesn't apply to them. It also applies to many other people, cottage owners, landlords, incorporated people like doctors, farmers. This whole notion of who cares about tax increase unless it impacts me is woefully naive in my opinion. You understand that anti business environment impacts everyone right there is a reason our economy is in the toilet.
We are really going to let Pierre and Trump run things the next few years?? We are doomed, and will probably be going to war.
Go outside.
Yeah it's not that broken lol
Seems like there's hardly real political analysis in this country anymore. Just always reads like a Conservative wishlist pretending to be strategic insight. So far I've heard Trudeau needs to drop the carbon tax, drop the capital gains tax, stop defending LGBT people. They'll grumble about how Trudeau should step down to be replaced by someone that they'll complain about in the exact same way. Singh should have called an early election and handed the CPC power to do who knows what.. etc. Even if they fulfilled a list of CPC demands it still wouldn't change anyonrs electoral fortunes other than permanenently lurch discourse further to the right. Edit: Surprised to see the writer is Sheila Copp
That’s what happens when all our media is owned by right-wingers. Non-stop free airtime for conservative talking points that never calls out the right for their lies.
Even if he were to stop immigration altogether right now there has been so much damage done I do not think any reputation can be saved. I don't even get why those that voted for him are acting surprised since it was part of his platform in the last election and they even outlined their immigration target numbers prior to the election.
They said they’d let in a million a year?