Will the Liberal Budget increase Capital Gains tax from 50% to 66.67% or 75%?


In the days before the Federal budget is revealed, rumours continue to swirl that the Liberals are going to raise taxes in a roundabout way, by reducing the tax break Canadians receive from capital gains.

In the 2007 Federal budget, the Conservatives increased the lifetime capital gains exemption 50% to $750,000, which means that the first $750,000 of the sale price of each shareholders company “Shares” will have a capital gain which is exempt from all income taxes.  The rate has changed over the years, so its’ not without reason to believe it might change again, especially in light of the money the Liberals promised to spend.

Currently, under the Income Tax Act, 50% of capital gains, on everything from property to stocks and mutual funds, are taxed.  The effective tax rate is therefore half of the marginal tax rate.  In some provinces, the current capital gains rate means tax of more than 25% on investments for high income investors.

Speculation is that the Liberals might move that taxable amount to 2/3’rds or 75% while they pay for all their election promises, and then eventually returning that to 50% near election time to encourage voter support.

With capital gains being taxed less heavily than dividends, there is little incentive for business owners to take cash out of their business and pay the taxes via dividends when they can just sell the company, pay the capital gain, and then start again.

The Liberals want to be more friendly to small business owners and the middle class, it will be interesting to see if they change this rate in the budget since they did not mention this in their election campaign.

A change of this magnitude might trigger an asset sale, or cool the real estate market for people who buy assets, then flip them within a short-term period of time, realizing a gain on the sale.

 

Ontarians Open Your Wallets… Wide! Liberal Budget 2016.


Nine years, Ontario has elected Liberal governments and for nine years, the taxpayers in this once mighty province are facing a budget whiledeeply in debt.

In fact, when the Ontario Liberals unveil their budget today, it’s going to include some really fancy talking and no mention of increasing taxes, yet it’s the only way they can eliminate the deficit and put a stop to the massive debt.

How massive is the debt?

Ontario has the largest debt of any sub-national government in the world!

The world!

Taxpayers pay an astounding $11-billion dollars a year on interest on the debt. Think about how many unions could be paid off with those funds, gas plants moved or documents shredded…

The Wynne Liberals will likely blame the Ontario Conservatives, or the Federal Conservatives, but they have already started to leak the “tax” increases coming down the pipe for Ontarians, including 4.3 cents to the price of a litre of gas plus an increase of $5/month to our natural gas bill – in order to protect the environment, no less…

Where the rest of the “savings” come from is unknown at this time, however, healthcare and education are likely to take a big hit.

Additionally, while it’s great that grocery stores are able to sell wine, the Liberals are likely to set a new minimum price for that bottle through this budget and add additional taxes on top of it.

Here is a recap of the “highlights” of the budget:

  • Ontario’s net debt will hit $308 billion in 2016-17.
  • Ontario’s debt is the largest of any sub-national jurisdiction in the world
  • Ontario taxpayers are paying $11.8 billion in interest payments per year
  • Interest on Ontario’s debt is going to increase to $13.1 billion by 2018-19
  • University and college tuition will be free for students from families with incomes of $50,000 or less.
  • More than half of students from families with incomes under $83,000 will receive non-repayable grants (which exceed the cost of an average tuition).
  • A carton if cigarettes will increase by $3.00, effective at 12:01 a.m. Friday.
  • Taxes on tobacco rise at the rate of inflation each year over the next five years.
  • The minimum price for a bottle of wine rises to $7.95.
  • The LCBO will be increasing their mark-up on wine to compensate for the fact consumers can purchase them at grocery stores, so in June there will be a 2% hike, followed by 2% hikes in 2017 and 2018 with a 1% hike in 2019.
  • There will also be annual increases of about 10 cents in the tax on wine sold in private retail outlets, increasing from 16.1 cents to 20.1 cents over four years
  • The $30 fee for Drive Clean vehicle emissions tests will be eliminated in 2017-18 – not the test – just the out of pocket cost which taxpayers will be paying to the tune of $60 million/year.
  • Hospitals will get their first funding increase in five years, up $345 million, plus $12 billion over 10 years in capital grants for about three dozen major hospital projects
  • The threshold for seniors to be eligible for cheaper drugs rises from $16,018 to $19,300.
  • The Liberals have committed $333 million over five years to redesign and improve autism services.

 

So as the Liberals promised, the Liberals shall deliver.  Spend, spend, debt, deficit, spend…  To the highest debt in the world.

The Conservatives are going to have a huge headache cleaning this mess up in 3 years!

Liberal Majority Government! Stephen Harper Resigns. I Hope the Tax Increase Was Worth It!


Well, Justin Trudeau and the Liberal Party of Canada are forming the next government of Canada – a Majority government, no less.

I cannot help but feel deep down inside that there was so much hatred directed at the Prime Minister and that people voted to remove him from office and chose the Liberals over the NDP to do so.

Unfortunately, the electing of the Liberal Party also brings with massive debt and after the spending spree the Liberals intend to go on, the deficit is going to increase at a rapid rate, and as we all know, the Liberals need money to pay for their promises and that money comes from you and I, the taxpayers of Canada.

UGH.

I hope the desire to remove Harper is worth the headaches we’ll be suffering with Justin in command, and I’m not just talking about their out-of-control spending.

Here are some great Justin oops which hopefully will not be occurring as leader of the country;

Unlike Ontario Premier Kathleen Wynne who has made MANY mistakes but covered them up with flat denial, avoidance and threats of lawsuits, Justin Trudeau has not appeared to understand the importance of thinking before he speaks.

During the controversy surrounding Bill C-51 – a bill where by the Canadian Security and Intelligence Service (CSIS), and 17 other government agencies are granted the authority to combat threats to Canada’s national security, preferably without infringing on Canadians’ Charter of Rights and Freedoms, the Liberal leader who voted for the Bill, has now admitted that his support for the Conservatives Bill might have been a mistake…

During the Maclean’s Magazine leaders debate, Trudeau responded to the conversation around the Liberals’ support of C-51, with these four words: “Perhaps it was naive.”

Here is how he voted on the Bill;

https://openmedia.ca/blog/whos-our-side-heres-how-your-mps-voted-bill-c-51

To give Trudeau the benefit of doubt, it was a tough decision to make, I’m sure. I heard him stumble and bumble over the easy questions about which shampoo he uses and which Avenger was his favourite, so maybe this way just a difficult question for him to answer.

He does like to go (vote) with the crowd… He knows legalizing pot is popular with the kiddies.  Personally, I believe pot should be legalized and taxed because the government can use the revenue to counter the health care costs associated with medical issues stemming from drug use.  Heck, they should legalize it and then increase EI funding and the length of time EI benefits are in effect to accommodate all the happy people…

He knows taxing the “rich” or the “1%” is popular with the other 99% of Canadians, and he knows that increasing spending to get stuff done is super-popular.  What he will soon realize is that whatever tax increase he throws towards the “1%” is not going to be enough to offset their massive spending increase which is coming down the pipe.

Oh, and the 1%… Who are these awful rich people who get all the tax breaks according to Trudeau?!? In Canada the highest Federal tax paid is 29% for those making over $138K per year. Add that to the provincial rate, and in Ontario, for example, someone making over $138K can pay over 42% of their income in tax. (http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html). Are these the people he will be targeting? Or, is Justin going after the REALLY rich people who based on very basic mathematics make the most money, but also pay the most back in taxes!

Trudeau hates small businesses, and this should become very evident in the Liberals first budget.  Trudeau believes small business owners create businesses as a vehicle to hide their massive incomes.  Doesn’t every 1%’er want to have to deal with the Canada Revenue Agency on a daily basis, be responsible for the income of their employees and paying taxes to keep the economy ticking so the Liberals can come in to power, increase taxes and call them frauds… Don’t think so.  I predict he’ll stop the small business tax decrease that the Conservatives brought in.  Even though the Liberals and the NDP have agreed to keep it, if elected, it’s a certain no go in my opinion.

I believe in discussing facts, so I went to the Liberal Party of Canada’s website, to the link for “My platform”, to make sure I presented his promises in a fair and reasonable manner. Unfortunately, because I was unwilling to click that I would be / or might be voting for Justin, I was not able to get in to the secret Liberals playground. Instead, I had the option to use a search option to add what I want from the Liberal Party.

I entered this; “Fiscal responsibility, Responsible spending, Respectful spending, Respect for Taxpayers money, Lower taxes, Do not raise taxes, accountability for words and actions.”

The search engine was not able to find a match for any of these items in the Liberal’s platform!

Oh my.

Deep down inside, I feel that the Liberals and their leader know that only in Ontario will citizens tolerate out of control spending and corruption by continuously voting in the same government which increased taxes, delisted services and has caused absolute chaos with teachers and soon doctors.

I believe there really is a left-wing media bias in Canada and sadly, I even predict that in their first (or second budget) the Liberals will even restore funding to the CBC, but not extend any funding to any other media outlets, especially to any who do not share their rosey view of the world.

When Trudeau said, “The budget will balance itself”, he believed it.

He also has very poor judgement. He accepted Conservative hand-off Eve Adams, who was being dropped by the Conservative party, and who then lost her nomination bid to Marco Mendicino. Where were the questions surrounding his judgement as has happened to Stephen Harper regarding his appointment of Mike Duffy and Pamela Wallin to the Senate.

Trudeau also publicly mistook Russia’s opposition leader Boris Nemtsov (who was shot dead in Russia) with former Russian Prime Minister Mikhail Kasyanov (whom he had met with), in a press release.

Or when he called a Conservative member a “Piece of Shit”, then went on a potty mouthed tirade where you can see that he actually enjoyed it without thinking for a moment about the implications down the road (http://operationmaple.ca/laugh-out-loud/justin-trudeau-swears-house-of-commons.html)

So much like his Dad…

Or, when being interviewed on Les francs-tireurs, Trudeau said, “Canada isn’t doing well right now because it’s Albertans who control our community and socio-democratic agenda.”

He also said Canada would be better served if there were more Quebecers than Albertans in charge.

Trudeau did apologize, and then tried to explain away his thoughtlessness by saying he didn’t hate Albertans but that his comments were directed the Prime Minister, Stephen Harper, who rose to power as an MP from Calgary, which he really thinks makes it all okay…

But he doesn’t just hate Alberta… He hates all of Canada, except Quebec. As a MP, Trudeau told Radio Canada; “I always say, if there came a point where I thought Canada really was Stephen Harper’s Canada … maybe I’d consider making Quebec a country. Oh yes. Absolutely. I know my values very well even if I no longer recognized Canada.”

(http://www.torontosun.com/2012/02/14/trudeau-says-hell-help-quebec-separate-if-harper-gets-his-way)

There is even a story – recently removed from the Internet – where Justin Trudeau declared that if aliens came from outer space, they would have the same rights as human beings, and would be granted Canadian citizenship…

Now I’m sure that the puppeteers pulling the strings of Trudeau are in full spin control, teaching Justin how to correct his oops and explain that clearly each and every comment has been taken out of context or manipulated by the evil Right-Wing media in Canada – wait, we don’t have that option so much anymore – then it must be Stephen Harper’s fault for forcing Justin to speak this way.

He’s young… ish.

He’s hip… ish.

He’s trying to keep up with the success of Ben Mulroney, but he’s just going to promise himself into a corner and ask every Canadian to Ben Dover.

On October 19th the Canadian public have made a choice, and I have a few words for voters in Canada… Caveat Emptor. Let the buyer beware!

I hope PM Trudeau v2.0 doesn’t embarrass the country, because after all the selfies have been taken, he still has to do the right thing.  Having former PM Stephane Dion as his Minister of Foreign Affairs is laughable and quite frankly frightening…

Time will tell.  Wait until his first budget and we’ll see how these predictions stand up!

Rob Ford vs. David Miller. Left vs. right. Subways vs. Island Bridge. The Facts.


The attacks on the current Toronto Mayor, Rob Ford throughout the subway vs. LRT fiasco really bugged me because I recall the reaction to the previous Mayor, David Miller when he cancelled the bridge to the Toronto Islands and it was nowhere near as harsh. 

It was going to cost the City of Toronto money to get out of that contract.  Miller said it would not cost the City anything and this was at a time where he was increasing taxes year-over-year with no cutting in site.  In the end, the Federal Conservative party of Canada paid that penalty on behalf of Toronto city counsel – but if Stephen Harper’s government did not come to the rescue of Toronto city counci, it would have cost taxpayers even more!

I went back to research the facts on this bridge deal to see how it went down, and to see if my councillor Joe Mihevc went to get a lawyers opinion on this matter too.  Maybe because of his role on the then left-leaning council he didn’t feel he needed to.  I also wanted to see if I could start to look back at the budgets and transit plan laid out by Miller to see how we got into this mess which Ford has been trying to get out of to much public dissatisfaction.

I decided to look at this from neither side, so I researched and present a fact based post.  Read it and come to your own conclusions.

I have chosen to highlight some key decisions made by Toronto’s former Mayor, David Miller, a documented member of the NDP party, and his city council in the 7 years Miller was mayor of Toronto.

I’m going to begin by quoting the Globe and Mail from February 2012;

“The island airport is such a success and such an obvious asset for the city that it is hard to believe that someone once ran for mayor on resisting it.  In 2003, David Miller campaigned on a pledge to stop the construction of a bridge from the mainland to the airport. He won, city council pulled its support for the bridge, and air travellers have been riding the short-hop ferry to the airport ever since.”

Much in the way current Toronto mayor Rob Ford voted on subways, Miller pulled the plug on the tunnel to the island airport and it cost $35 million dollars to do so.  Ford pulled the plug on Transit city and costs are projected at $49 million. 

Ironically, that struggle over the bridge to the island airport seems like ancient history now. As a result of the success of Porter Airlines, the island airport has become a popular and convenient downtown alternative to Toronto’s Pearson International Airport in Mississauga with around 1.5 million passengers using it in 2011.

So instead of the bridge, the Toronto Port Authority is now going to build a $82.5-million, 240-metre tunnel which will allow passengers to and from the terminal at Billy Bishop airport on four moving sidewalks, eliminating the wait for the ferry.

Mayor Rob Ford called the tunnel “fantastic news” for the city and for the waterfront, “the day that nobody ever thought was going to come.”

Of course, the airport still has its critics. Local Councillor and pretender for the Mayorship of Toronto, Adam Vaughan was down at the waterfront with a handful of protesters who don’t like the noise and taxi traffic around the airport ferry dock. He calls Billy Bishop a “boutique service.”  If so, it’s a pretty popular boutique.

Mr. Miller feared the airport would delay waterfront revitalization by preserving “industrial” activity there. He said anything but a “sleepy commuter airport” would conflict with the city’s plans. In fact, the bustle of the airport has added to the vitality of the waterfront and the city’s downtown.  Porter draws it’s customers from the downtown condo boom and it’s closeness to the financial district which added to the city’s new cool factor.

The tunnel is scheduled to open in the spring of 2014.

Facts: David Miller was the most prominent opponent of Toronto Mayor, Mel Lastman’s plan to build a $22 million bridge to the Toronto Island Airport.  Miller argued that the bridge would prevent the city from revitalizing its waterfront, and asserted that the proposed deal put the interests of developers and lobbyists ahead of the public. The bridge became a major issue when he ran for mayor during the 2003 campaign.[

Fact: At one point in Miller’s election campaign he raised the possibility of collecting tolls on the Don Valley Parkway and Gardiner Expressway to help pay for social programs. After criticism from other candidates, he dropped the suggestion.

Fact: Soon after his election as Mayor of Toronto, Miller led the council to reverse its support for the Toronto City Centre Airport Bridge. The vote, held on December 3, 2003, was 32-12 in favour of withdrawal. Afterwards, there were threats of legal action against the City by the Toronto Port Authority (TPA) and developer Robert Deluce, which were settled in 2005 when the federal Conservative government agreed to pay $35 million in compensation.

Fact: The federal payment was controversial for both supporters and opponents of Miller’s administration. Liberal MP Tony Ianno defended it as providing fair compensation to legitimate claimants, and saying that the payment proved Miller wrong when he said he would cancel the bridge without incurring further expense.  Miller’s allies, including then NDP leader Jack Layton, argued that the payout was overly generous, and did not reflect the true costs of cancellation.

Let’s look at Miller’s first budget as Mayor of Toronto to get an idea how spending in Toronto shot out of control and how there were very little consideration made to reducing spending or taxation;

Fact:  Miller’s first budget as mayor of Toronto passed by city council by a vote of 29-10. This budget increased spending by 6%, increased residential property taxes by 3% and increased business and industrial property taxes by 1.5%

Fact:  Miller’s second budget was a balanced budget by taking $19.8 million from the City’s reserved fund.  Miller blamed this on Dalton McGuinty’s Liberal government not providing the $72.3 million for provincially-mandated social programs.  Residential property taxes were increased by 3% and business and industry property taxes were increased by 1.5%.

Fact: In late 2005, Miller endorsed a policy which shifted a portion of Toronto’s property tax burden from businesses and commercial operators to homeowners. He argued that it was necessary to prevent an exodus of jobs from the city.

Fact: Miller clashed with Toronto Board of Trade President and CEO and former Toronto Raptors GM Glen Grunwald at a February 2006 budgetary consultation meeting, after Grunwald presented a number of policy measures designed to solve Toronto’s budget shortfall, including; reducing spending on non-priority items, increasing user fees, privatizing some services and implementing the auditor general’s 800 suggestions. Miller criticized the suggestions as “poorly researched”, and said that the Board of Trade presentation “didn’t befit the role they have as city builders.” Toronto Star columnist Royson James, suggested that Miller’s response was disproportionately harsh, and may have alienated some business interests. Other critics pointed out Miller’s “city hall has done too little to tighten its belt”.

Fact: By January 2006, Toronto was facing a $532 million shortfall on its operating budget. To promote cost-cutting, Miller announced a hiring freeze, however still no cost-cutting.  His budget passed in Toronto city council by a vote of 27-17.  Property taxes were increased by 3% and business taxes increased by 1%.

Fact: 2007 Toronto Budget included a 3.8% property tax increase, new municipal taxes, new and higher parking fees under the new City of Toronto Act, a $60 vehicle-registration tax and a 1.5% land transfer tax.  Still no cost-cutting.

Fact: David Miller asserted that residents support the notion of increased taxes as long as the money is being used properly.

Fact: A survey conducted by the Environics Research Group showed that 70% of respondents supported a cut in expenditures rather than new taxes.

Fact:  When the light bulb went on that cuts were needed, it was David Miller who proposed service cuts from the operating budget including the closing of the Sheppard Subway line, cancelling underused bus routes, and scrapping renovations and extra staff to the mayor’s office. Miller argued that these were the only responsible steps that Toronto could take to prevent a financial crisis.

Fact: Former Scarborough Councillor Brian Ashton who recently retired from Toronto City Council – undefeated after nine successful elections over a distinguished 30-year career disagreed with Miller’s plan and was dismissed from the executive committee.

Fact: Miller’s executive committee was part of the new “strong mayor” system where key issues are dealt with before being brought to full council. The stated intention was to streamline the decision-making process.

Fact: Mayor Rob Ford tried this approach and was shot down quite quickly by councillor Karen Stintz stating “Council is supreme”.  Only when it suits the lefties, Karen. 

Fact: In 2007 and under Miller’s direction, City Manager Shirley Hoy implemented $34-million in service cuts to the budget without seeking council approval. A spokesperson for the Mayor stated “we’ve got a serious financial shortfall that has to be addressed”. Community centres and libraries were closed on Mondays and the opening of ice rinks was delayed in order to cut costs.  An arbitrator later ruled that the library closures violated the collective bargaining agreement with the union.

Fact: David Miller was a strong advocate for the Toronto Transit Commission,

Fact: Rob Ford is portrayed to not be a friend of the TTC.

Fact: In late 2004, Dalton McGuinty’s provincial Liberal government announced that it would provide $355 million in provincial gas tax revenues for the TTC over three years.

Fact: In 2005, with Miller’s permission, the TTC approved a fare increase with the price of adult tickets and tokens increasing by ten cents, and adult cash fares increased by 25 cents.

Fact: In 2004, Miller endorsed the creation of the St. Clair streetcar right-of-way, which passed in council by a vote of 36-7.

Fact:  Even former Toronto mayor John Sewell, a long-standing supporter of public transit, opposed this plan.

Fact:  As a member of Metrolinx, Miller and TTC planners unveiled a 15 year plan to construct a light-rail network (LRT) linking almost every neighbourhood within the city. The plan was conditional on funding from other levels of government with the Liberal government of Ontario committed itself to funding two-thirds of the project.

Fact: Miller formally launched a campaign for Canada’s cities to receive one of six cents charged on every dollar under the existing Goods and Services Tax at the Toronto City Summit Alliance’s Toronto Summit 2007. He has argued that the transfer will provide a reliable and permanent source of funding for cities. A website called http://www.onecentnow.ca has been set up to promote the campaign. Karen Stintz and several other councillors criticized Miller for spending $100,000 on the program before it was debated on and approved by council, and suggesting that he was advancing his personal agenda. Miller’s office argued that council approval was unnecessary for the initiative, as it had appeared in his campaign platform

Note to this last paragraph:  At the end of January, a report by a Toronto law firm, solicited by councillor Joe Mihevc, stated Mayor Rob Ford did not have the legal authority to cancel Transit City without city council approval. The report states the mayor’s memorandum of understanding with the province cannot be acted upon without council approval. He did not have authority to stop work on Transit City and proceed with his own plan even though it had appeared in his campaign platform.

——————————————

So by my accounting of facts, it would appear the Miller legacy included $35 million dollar loss on the cancelling of the Toronto Island bridge paid for by the federal government.

Increased property taxes every year.

Increased business and industry taxes every year.

Cost savings came in the form of closing or reducing city services – libraries, ice rinks, other public services.

Increased TTC fares

Increased and new parking taxes and levies.

No new subways built.

A move from the “council is supreme” mantra when it is convenient as “discussed in election platforms”.

Well done, Toronto.  I can see now why all the backlash towards Rob Ford’s team.  He was voted in on a couple main promises, one being that instead of the Miller tax, levy and beg politics he wanted to cut waste, something Miller was unwilling or unable to do in his 7 years as Toronto Mayor. 

Miller manipulated the rules of city council to suit his needs re: budgets, TTC matters and transfer payments and there was no backlash from the councillors, no legal letters from Joe Mihevc, no open forum sessions where people came, dressed in costumes and told stories to the mayor and council as a show of protest / stupidity.  Toronto took the tax hit and kept quiet.  Why wouldn’t Ford expect some of that same consideration? 

Do you see how both leaders have not been treated the same by the press or by the citizens of Toronto?

Just a little, right.