03.19.2019 04:12 PM

The budget reviewed, in tweets

16 Comments

  1. whyshouldIsellyourwheat says:

    The Canadian government is now directly speculating in housing and condominium development, at the top of the effing market.

    This is going to end badly, for everyone, not just the suckers who overextend themselves using the government-sponsored mortgage.

  2. whyshouldIsellyourwheat says:

    The under-the-radar effect on the election will be the changes is small business taxation and accounting rules from last years budget.

    My brother runs his own (non-incorporated) family and labour law practice and has always voted Liberal. He won’t be this year. I expect there are many more like him.

    He has finally seen the Liberal Party is for the elites only after they bludgeoned him over the head with the accounting changes (not the tax changes) for small businesses.

    A lot of individuals with be filing taxes under the new rules for the first time this spring. I expected it will change the minds of a lot of people who typically saw themselves as Liberals.

    • BobM says:

      I would expect that a large number of small business owners are coming to grips with this same fallout from the changes. I know I am…

      I work in the technology business where the whole “gig/contract” model is a way of life. That has all gone by the wayside now.

      I could not speak for other business areas but what I do is a fungible asset, in great demand south of border and in other jurisdictions. Being treated from a tax perspective as just an employee while taking the risks of an independent rankles to say the least. A substantial number of colleagues concur.

      Never mind losing votes. The real problem not yet realized is the potential for the departure of such skilled people.

      The fallout of these misguided changes have not yet begun to be felt.

      • Martin says:

        Exactly right. The original intent was to go after professionals like doctors who, by the way, in Ontario, were given the ability to incorporate as part of their collective bargaining with the Ontario government(while Butts and Telford were there) as an offset to fee reductions. So, ironic that the same bunch took those same bargained tax benefits away from them. Many doctors were either apolitical or liberals. Many are now motivated, donating Tories. Going after the professionals had unintended consequences to people like BobM. The new TOSI rules get applied to businesses that don’t necessarily make widgets but there is no way they should be caught up in the new regime given that many employee hundreds of employees at great risk to the shareholders. The rules also have many other unintended consequences and bugs that are too technical to explain in a short post but that is what happens when a naive government tries to ram major tax reform through without taking the time to do it properly. There was a reason the last major tax reform(the recommendations of the Carter Commission with respect to the taxation of capital gains and the concept of integration) took almost 10 years from the formation of the commission in 1962 to legislation in 1971. These things are very complicated. Even that reform took many years after 1971 to iron out the bugs. These latest changes were done too quickly in a haphazard, incompetent manner and should have been looked at as part of a comprehensive tax reform package that many are calling for.

        • Won’t the TOSI rules only apply where to owners “hire” thier wife and kids? People who do that deserve extra scrutiny.

          • Martin says:

            That is how our young man tried to sell it but it is nowhere near that simple and people in Finance don’t even understand the unintended consequences that relate to holding companies, the definition of a “service business” in today’s tech economy, etc. and the technical issues they have created so it is understandable your typical civilian voter won’t. Ask them a direct question and they will say “we will have to see”. As mentioned, to try and explain the issues would take a multiple page post so I am not going to do it here. Will provide one small example though. I have one situation where a couple got bought out and retired based on a certain set of taxation rules and the CRA has now changed those rules resulting in a doubling of their tax bill which may have changed their retirement decision. There is no world where that is fair. Finance has historically made changes on a go forward basis. They didn’t in this case which was just one of the many problems with their obviously flawed rollout.

      • How exactly to the tax changes impact you?

        I understand there is an extra tax on interest you collect from money stored in your company, but that would only be a benefit if you have maxed out your RRSPs and TSAs, and even then the interest you get these days saving money for a couple of years would be pretty small.

        • Martin says:

          The TOSI rules. Much worse than the passive investment rules you are referring to.

        • BobM says:

          As Martin mentions, the TOSI “rules”. I can’t even provide my wife with a dividend at reasonable tax rate.

          This is the same woman who literally shoveled dirt to make whatever income possible to get this business going. It is now being construed as tax cheating were she to receive a dividend for that work and sacrifice and taxed at the maximum rate.

          • Martin says:

            And, by the way, Darwin’s explanation of the passive investment rules doesn’t remotely approach what the actual rules and their impacts are. Once again, a short explanation would be impossible in this forum.

    • Martin says:

      The other dirty little secret I have seen nowhere in the media is the fact that a lot of the unexpected revenue that they are spending was tax that many people prepaid last year to take advantage of various family members’ low tax brackets for the last time before the changes came into force. That revenue will dry up but the impact won’t be seen until after the election.

  3. Sean says:

    Man they were good today: banging desks, shouting, ” Let her speak”, then walking out. Must wonder how close Adam Vaughan came to dropping his pants and mooning someone.

    Trudeau resorted to a grade five tactic: making faces, sarcastically smiling at the adults across the isle. Well at least this time he didn’t stick out his tongue.

    Freeland , in response to Rempel, came across like a pompous dung beetle, sitting on top of a steaming pile, while pretending to be quick on her verbal feet- she’s not.

  4. Gord Tulk says:

    So is it fair to argue that the LPC boosted spending several billion in an attempt to provide additional cover for the SNC-LAVALIN cover-up?

    If so the billions in reputational cost now have billions in government waste added to the pyre that is the vain attempt to save JTs political skin.

    Deficits and debt now out well past 2050 (they won’t even make an estimate now)

    No tax cuts – continue to make Canada hopelessly uncompetitive versus the US.

    A crashing real estate market in YVR and YYC and likely the country is already in the first quarter of a recession.

    The wrong budget for our time.

  5. Pedant says:

    The housing measures are ridiculous. They will simply spike demand thereby raising asking prices. In the end, this will cause young buyers to pay MORE, not less. However as much as I despise this government, I know that the Conservatives would have introduced similarly boneheaded policy. When it comes to housing, both parties are equally in bed with the realtor cartel and committed to inflating the bubble.

    As long as Canada opens the door to far more people than existing housing stock and infrastructure can support (and 3x more per capita than the US), there will be zero relief. Great for Boomers who won the birth lottery and bought 30-40 years ago. Horrible for Millennials.

    • Pedant says:

      I just found out a bit more about this absurd CMHC equity sharing scam/scheme. So apparently if a property goes up in value, the CMHC gets to participate in that appreciation – that is, the loan is paid back upon selling plus % appreciating. No word yet on what happens if the home values depreciates.

      This is infuriating. The government now has clear financial incentive, in addition to political incentive, to inflate the housing bubble to infinity. And the taxpayer now assumes far more of the risk if it all goes to hell. This is shockingly bad policy I’m almost speechless.

  6. The Doctor says:

    In 2015, Justin Trudeau looked us all in the face and promised that the budget would be balanced in 2019. He lied his smug little privileged face off. Just think about that.

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