Speaker 1: A young woman named Samantha Diegris who is with the
Speaker 1: Montreal Economic Institute that's one of Canada's leading economic and
Speaker 1: public policy think tanks. She just wrote an outstanding column
Speaker 1: in Canada's Financial Post and the headline of it is
Speaker 1: declining tax competitiveness is failing Canada's young people.
Speaker 2: Samantha, welcome to the show.
Speaker 3: Thanks so much for having me.
Speaker 1: So tell me what inspired this particular column about how
Speaker 1: high taxes and high spending in Canada are squelching the
Speaker 1: opportunities for young people.
Speaker 3: Sure, so, the Tax Foundation comes out with its annual
Speaker 3: tax Competitiveness rating, and what my colleagues and I realized
Speaker 3: was that we were getting bumped too spots compared to
Speaker 3: last last year. Last year we ranked fifteenth and this
Speaker 3: year seventeenth, and we wanted to know why. And the
Speaker 3: Tax Foundation basically came out and said that Canada's decision
Speaker 3: to increase the capital gains and inclusion rate. So capital
Speaker 3: gains is the profit you make on stocks, or if
Speaker 3: you buy a if you sell a second property, say,
Speaker 3: our government decided to raise that from fifty percent to
Speaker 3: sixty six point seven percent, and this is why we dropped.
Speaker 1: So I just want to be clear. I want to
Speaker 1: understand that I just heard you properly. If you make
Speaker 1: a profit, the government is going to take more than
Speaker 1: half of it just for the privilege of being in Canada.
Speaker 3: Well, not exactly. So the inclusion rate means that on
Speaker 3: that profit, say you make one hundred dollars, fifty percent
Speaker 3: of that was taxable. Now sixty six point seven percent
Speaker 3: is taxable. But when you compare it to the States,
Speaker 3: I know you guys have one hundred percent inclusion rate,
Speaker 3: but your effective rate is actually much lower. I think
Speaker 3: it's about fifteen to twenty percent, depending on where you
Speaker 3: find yourself. In Canada, it's about thirty three percent minimum.
Speaker 1: Well going to be taxed thirty three percent on sixty
Speaker 1: five percent, So that's pretty significant. And why are these
Speaker 1: taxes so high? What are you guys getting for those taxes?
Speaker 1: And what has been happening lately was Canadian government spending?
Speaker 3: Well, the irony of all this, man, is that our
Speaker 3: government will tell us it's all for intergenerational fairness. It's
Speaker 3: the rich in Canada have gone by without paying their
Speaker 3: fair share and this is retribution for that, when in reality,
Speaker 3: what this did was it it sparked a one time
Speaker 3: fire sale of assets, and our Parliamentary Budget Office, which
Speaker 3: reviews spending and tax revenue, that this money after the
Speaker 3: first year is not going to get us as much
Speaker 3: in terms of tax revenue as the government predicted. So
Speaker 3: basically it's it's ideological. They're saying that this is, you know,
Speaker 3: a way to balance the scales for young people who
Speaker 3: are essentially boxed out of the housing market as it is,
Speaker 3: But in reality, it's not going to get us a
Speaker 3: whole lot of money, and in fact, it's going to
Speaker 3: deter investment.
Speaker 1: This is very similar to the same tales that I've
Speaker 1: been talking about for a long time here in the
Speaker 1: United States, and that government spending is now sucking up
Speaker 1: so much of the economy that it is very, very
Speaker 1: difficult to have the extra extra money laying around to
Speaker 1: expand a business or hire an employee or do any
Speaker 1: of those things. But you're looking at this from the
Speaker 1: perspective of the future of the young people in Canada.
Speaker 1: I had no idea that young Canadians are the unhappiest
Speaker 1: group of people in the G seven.
Speaker 2: That's kind of crazy to me.
Speaker 3: Oh, it's you know, and honestly, It's not super surprising.
Speaker 3: If you look at a bunch of metrics on healthcare,
Speaker 3: one in every four young Canadians, so Canadians under thirty
Speaker 3: five don't have access to a doctor, a primary care physician,
Speaker 3: which means whenever we get sick, we either have to
Speaker 3: pray or we go to an emergency room. Young Canadians
Speaker 3: have stalled having children, getting into the housing market, and
Speaker 3: so this just seems like another, you know, another impediment
Speaker 3: to success and you know, living well in Canada. They
Speaker 3: want to make it harder for us to start a
Speaker 3: business and you know, build something of ourselves in our communities.
Speaker 2: I worry where are things now?
Speaker 1: I know that Justin Trudeau is having some difficulty. Are
Speaker 1: are Canadians pushing back against the sort of grandiose social
Speaker 1: engineering plans? Are they sick of it yet? I guess
Speaker 1: is what I'm asking.
Speaker 3: Yeah, I think that we are seeing the Conservatives in
Speaker 3: Canada pull about twenty points ahead the federal Liberals, which
Speaker 3: is quite surprising. They're performing extremely well amongst younger cohorts,
Speaker 3: and of course it's a reaction to the fact that again,
Speaker 3: by every single metric, we're doing worse and will do
Speaker 3: worse than our parents. The fact that they've just made
Speaker 3: it harder for us to build a business. Fifty percent
Speaker 3: of Canadians are employed by small and medium enterprises. One
Speaker 3: point twenty six million Canadians will be tax and an
Speaker 3: extra rate now because of this. And it's not like
Speaker 3: we're flushed flush with businesses. Twenty years ago Canada had
Speaker 3: one hundred thousand more entrepreneurs than we did today. So
Speaker 3: you know, we see the trends.
Speaker 2: We see that.
Speaker 3: You know, we're lower on business, We're lower on business investment.
Speaker 3: Business investment per worker in Canada is about ten thousand
Speaker 3: dollars less than per worker in the US.
Speaker 2: Holy cow.
Speaker 1: I just got a text message on our listener text
Speaker 1: line Mandy as a Canadian who left asked her about
Speaker 1: the price of beer in Ontario. Lord tundering Jesus talk
Speaker 1: about tax to death, seventy dollars for twenty four cans
Speaker 1: of beer. Insane. I didn't expect beer to make an appearance.
Speaker 1: But isn't that sort of indicative of what everything is
Speaker 1: like now? I mean, are all the taxes that high?
Speaker 3: Oh? Absolutely, I'm not sure what it is in the States,
Speaker 3: but in Canada, a lot of our provinces have liquor
Speaker 3: boards and you can until very recently in Ontario specifically,
Speaker 3: only buy alcohol through the states. In Quebec, it's the
Speaker 3: province where I'm from, it's essentially the same. You can
Speaker 3: buy beer and wine at the corner store, but liquor
Speaker 3: and anything you know, very nice, you have to go
Speaker 3: through the government. Marijuana it's the same the same way
Speaker 3: through the government, and the reason is because they the
Speaker 3: markup is substantial when the government comes in. And not
Speaker 3: to mention also interprovincial trade of alcohol, so you're it
Speaker 3: is very very difficult to say, you know, you want
Speaker 3: to buy a nice wine from British Columbia, I want
Speaker 3: to order it online to Quebec. Not allowed because the
Speaker 3: government stands in the way of trade so that they
Speaker 3: can benefit from it.
Speaker 1: So we have a lot of people in the States
Speaker 1: sort of wax poetic about especially the healthcare system. And
Speaker 1: I thought that was interesting that you brought up the
Speaker 1: healthcare system as a specific example. Do you think that
Speaker 1: if there was a vote, would Canadians vote to partially
Speaker 1: privatize or maybe fully privatize that system in the hopes
Speaker 1: of getting better care.
Speaker 2: Is there any polling date on that.
Speaker 3: Yeah, a growing number of Canadians, I would say a majority,
Speaker 3: but a growing number of Canadians are open to allowing
Speaker 3: kind of more independent actors into our private into our
Speaker 3: public healthcare system because what we're seeing now is just, yeah,
Speaker 3: it's unconscionable. You know, the healthcare, the public and universal
Speaker 3: healthcare system in Canada U s FEE. It's such a
Speaker 3: point of national pride. But now that six point five
Speaker 3: million Canadians don't have a family doctor, people are ending
Speaker 3: up bottlenecking emergency rooms. People are delaying surgeries that are
Speaker 3: way outside what is medically recommended. Some provinces are having
Speaker 3: to actually send patients to the United States and paying
Speaker 3: for it there because they can't get treatment in Canada.
Speaker 3: And growing up, you know, the America healthcare system was
Speaker 3: a huge fear mongering point amongst Canadians. You know, we
Speaker 3: hear horror stories about people having to sell their homes
Speaker 3: to receive treatment. And of late, Mandy, I've not heard
Speaker 3: anything negative about the American healthcare system from in Canada
Speaker 3: at least.
Speaker 1: Samantha Digress is my guest. You really should read her
Speaker 1: column from the Financial Post in Canada. She's with the
Speaker 1: Montreal Economic Institute. I appreciate the work that you're doing, Samantha.
Speaker 1: Keep up the great job, and hopefully we'll talk again
Speaker 1: in the future.
Speaker 3: Thank you so much, Manny.
Speaker 2: All right, that is Samantha Digress.