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<v Speaker 1>A young woman named Samantha Diegris who is with the

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<v Speaker 1>Montreal Economic Institute that's one of Canada's leading economic and

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<v Speaker 1>public policy think tanks. She just wrote an outstanding column

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<v Speaker 1>in Canada's Financial Post and the headline of it is

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<v Speaker 1>declining tax competitiveness is failing Canada's young people.

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<v Speaker 2>Samantha, welcome to the show.

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<v Speaker 3>Thanks so much for having me.

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<v Speaker 1>So tell me what inspired this particular column about how

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<v Speaker 1>high taxes and high spending in Canada are squelching the

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<v Speaker 1>opportunities for young people.

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<v Speaker 3>Sure, so, the Tax Foundation comes out with its annual

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<v Speaker 3>tax Competitiveness rating, and what my colleagues and I realized

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<v Speaker 3>was that we were getting bumped too spots compared to

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<v Speaker 3>last last year. Last year we ranked fifteenth and this

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<v Speaker 3>year seventeenth, and we wanted to know why. And the

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<v Speaker 3>Tax Foundation basically came out and said that Canada's decision

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<v Speaker 3>to increase the capital gains and inclusion rate. So capital

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<v Speaker 3>gains is the profit you make on stocks, or if

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<v Speaker 3>you buy a if you sell a second property, say,

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<v Speaker 3>our government decided to raise that from fifty percent to

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<v Speaker 3>sixty six point seven percent, and this is why we dropped.

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<v Speaker 1>So I just want to be clear. I want to

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<v Speaker 1>understand that I just heard you properly. If you make

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<v Speaker 1>a profit, the government is going to take more than

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<v Speaker 1>half of it just for the privilege of being in Canada.

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<v Speaker 3>Well, not exactly. So the inclusion rate means that on

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<v Speaker 3>that profit, say you make one hundred dollars, fifty percent

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<v Speaker 3>of that was taxable. Now sixty six point seven percent

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<v Speaker 3>is taxable. But when you compare it to the States,

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<v Speaker 3>I know you guys have one hundred percent inclusion rate,

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<v Speaker 3>but your effective rate is actually much lower. I think

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<v Speaker 3>it's about fifteen to twenty percent, depending on where you

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<v Speaker 3>find yourself. In Canada, it's about thirty three percent minimum.

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<v Speaker 1>Well going to be taxed thirty three percent on sixty

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<v Speaker 1>five percent, So that's pretty significant. And why are these

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<v Speaker 1>taxes so high? What are you guys getting for those taxes?

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<v Speaker 1>And what has been happening lately was Canadian government spending?

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<v Speaker 3>Well, the irony of all this, man, is that our

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<v Speaker 3>government will tell us it's all for intergenerational fairness. It's

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<v Speaker 3>the rich in Canada have gone by without paying their

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<v Speaker 3>fair share and this is retribution for that, when in reality,

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<v Speaker 3>what this did was it it sparked a one time

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<v Speaker 3>fire sale of assets, and our Parliamentary Budget Office, which

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<v Speaker 3>reviews spending and tax revenue, that this money after the

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<v Speaker 3>first year is not going to get us as much

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<v Speaker 3>in terms of tax revenue as the government predicted. So

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<v Speaker 3>basically it's it's ideological. They're saying that this is, you know,

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<v Speaker 3>a way to balance the scales for young people who

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<v Speaker 3>are essentially boxed out of the housing market as it is,

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<v Speaker 3>But in reality, it's not going to get us a

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<v Speaker 3>whole lot of money, and in fact, it's going to

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<v Speaker 3>deter investment.

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<v Speaker 1>This is very similar to the same tales that I've

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<v Speaker 1>been talking about for a long time here in the

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<v Speaker 1>United States, and that government spending is now sucking up

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<v Speaker 1>so much of the economy that it is very, very

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<v Speaker 1>difficult to have the extra extra money laying around to

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<v Speaker 1>expand a business or hire an employee or do any

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<v Speaker 1>of those things. But you're looking at this from the

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<v Speaker 1>perspective of the future of the young people in Canada.

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<v Speaker 1>I had no idea that young Canadians are the unhappiest

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<v Speaker 1>group of people in the G seven.

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<v Speaker 2>That's kind of crazy to me.

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<v Speaker 3>Oh, it's you know, and honestly, It's not super surprising.

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<v Speaker 3>If you look at a bunch of metrics on healthcare,

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<v Speaker 3>one in every four young Canadians, so Canadians under thirty

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<v Speaker 3>five don't have access to a doctor, a primary care physician,

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<v Speaker 3>which means whenever we get sick, we either have to

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<v Speaker 3>pray or we go to an emergency room. Young Canadians

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<v Speaker 3>have stalled having children, getting into the housing market, and

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<v Speaker 3>so this just seems like another, you know, another impediment

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<v Speaker 3>to success and you know, living well in Canada. They

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<v Speaker 3>want to make it harder for us to start a

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<v Speaker 3>business and you know, build something of ourselves in our communities.

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<v Speaker 2>I worry where are things now?

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<v Speaker 1>I know that Justin Trudeau is having some difficulty. Are

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<v Speaker 1>are Canadians pushing back against the sort of grandiose social

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<v Speaker 1>engineering plans? Are they sick of it yet? I guess

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<v Speaker 1>is what I'm asking.

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<v Speaker 3>Yeah, I think that we are seeing the Conservatives in

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<v Speaker 3>Canada pull about twenty points ahead the federal Liberals, which

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<v Speaker 3>is quite surprising. They're performing extremely well amongst younger cohorts,

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<v Speaker 3>and of course it's a reaction to the fact that again,

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<v Speaker 3>by every single metric, we're doing worse and will do

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<v Speaker 3>worse than our parents. The fact that they've just made

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<v Speaker 3>it harder for us to build a business. Fifty percent

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<v Speaker 3>of Canadians are employed by small and medium enterprises. One

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<v Speaker 3>point twenty six million Canadians will be tax and an

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<v Speaker 3>extra rate now because of this. And it's not like

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<v Speaker 3>we're flushed flush with businesses. Twenty years ago Canada had

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<v Speaker 3>one hundred thousand more entrepreneurs than we did today. So

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<v Speaker 3>you know, we see the trends.

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<v Speaker 2>We see that.

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<v Speaker 3>You know, we're lower on business, We're lower on business investment.

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<v Speaker 3>Business investment per worker in Canada is about ten thousand

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<v Speaker 3>dollars less than per worker in the US.

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<v Speaker 2>Holy cow.

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<v Speaker 1>I just got a text message on our listener text

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<v Speaker 1>line Mandy as a Canadian who left asked her about

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<v Speaker 1>the price of beer in Ontario. Lord tundering Jesus talk

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<v Speaker 1>about tax to death, seventy dollars for twenty four cans

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<v Speaker 1>of beer. Insane. I didn't expect beer to make an appearance.

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<v Speaker 1>But isn't that sort of indicative of what everything is

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<v Speaker 1>like now? I mean, are all the taxes that high?

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<v Speaker 3>Oh? Absolutely, I'm not sure what it is in the States,

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<v Speaker 3>but in Canada, a lot of our provinces have liquor

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<v Speaker 3>boards and you can until very recently in Ontario specifically,

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<v Speaker 3>only buy alcohol through the states. In Quebec, it's the

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<v Speaker 3>province where I'm from, it's essentially the same. You can

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<v Speaker 3>buy beer and wine at the corner store, but liquor

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<v Speaker 3>and anything you know, very nice, you have to go

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<v Speaker 3>through the government. Marijuana it's the same the same way

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<v Speaker 3>through the government, and the reason is because they the

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<v Speaker 3>markup is substantial when the government comes in. And not

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<v Speaker 3>to mention also interprovincial trade of alcohol, so you're it

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<v Speaker 3>is very very difficult to say, you know, you want

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<v Speaker 3>to buy a nice wine from British Columbia, I want

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<v Speaker 3>to order it online to Quebec. Not allowed because the

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<v Speaker 3>government stands in the way of trade so that they

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<v Speaker 3>can benefit from it.

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<v Speaker 1>So we have a lot of people in the States

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<v Speaker 1>sort of wax poetic about especially the healthcare system. And

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<v Speaker 1>I thought that was interesting that you brought up the

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<v Speaker 1>healthcare system as a specific example. Do you think that

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<v Speaker 1>if there was a vote, would Canadians vote to partially

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<v Speaker 1>privatize or maybe fully privatize that system in the hopes

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<v Speaker 1>of getting better care.

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<v Speaker 2>Is there any polling date on that.

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<v Speaker 3>Yeah, a growing number of Canadians, I would say a majority,

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<v Speaker 3>but a growing number of Canadians are open to allowing

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<v Speaker 3>kind of more independent actors into our private into our

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<v Speaker 3>public healthcare system because what we're seeing now is just, yeah,

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<v Speaker 3>it's unconscionable. You know, the healthcare, the public and universal

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<v Speaker 3>healthcare system in Canada U s FEE. It's such a

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<v Speaker 3>point of national pride. But now that six point five

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<v Speaker 3>million Canadians don't have a family doctor, people are ending

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<v Speaker 3>up bottlenecking emergency rooms. People are delaying surgeries that are

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<v Speaker 3>way outside what is medically recommended. Some provinces are having

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<v Speaker 3>to actually send patients to the United States and paying

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<v Speaker 3>for it there because they can't get treatment in Canada.

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<v Speaker 3>And growing up, you know, the America healthcare system was

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<v Speaker 3>a huge fear mongering point amongst Canadians. You know, we

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<v Speaker 3>hear horror stories about people having to sell their homes

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<v Speaker 3>to receive treatment. And of late, Mandy, I've not heard

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<v Speaker 3>anything negative about the American healthcare system from in Canada

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<v Speaker 3>at least.

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<v Speaker 1>Samantha Digress is my guest. You really should read her

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<v Speaker 1>column from the Financial Post in Canada. She's with the

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<v Speaker 1>Montreal Economic Institute. I appreciate the work that you're doing, Samantha.

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<v Speaker 1>Keep up the great job, and hopefully we'll talk again

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<v Speaker 1>in the future.

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<v Speaker 3>Thank you so much, Manny.

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<v Speaker 2>All right, that is Samantha Digress.