[Canada] Canadian Politics Redux

[Grey Fox]

Yeah, totally unnecessary. CAQ will CAQ.

I believe that would be fine and it's what I think they should do. Iirc, in general the law isn't that precise.

[viper37]

No more half measures: to get out of our growth rut, Canada needs radical tax reform


I'd need to read more on this, from the economists, to form a solid opinion.

It seems really complicated to implement.

[Bauer]

No more half measures: to get out of our growth rut, Canada needs radical tax reform


I'd need to read more on this, from the economists, to form a solid opinion.

It seems really complicated to implement.

That is an interesting topic and yeah complicated.  Canada falling behind on productivity was a topic when I did my economics degree 20+ years ago.  It wasn't fully understood then or known if it would continue, but it's steadily become a bigger problem over time.  In my opinion it is related to the tax structure and probably the difficulty of approval process.  The essential problem is basically to get businesses to reinvest in productivity enhancements.

[Bauer]

So Bill C5 went through after some marathon amendments.  Lots of critics of how much power it gives government, already First Nations threatening protests.  Cracks in the plan to rush big projects already.

I like most of what I see/hear from Carney himself but I don't really trust his party that much... ultimately his success as PM will come down to how effectively the projects get done.

And the debt is a huge concern for me.  I'm glad we finally are meeting 2% nato spending but can we afford 5% 

[viper37]

No more half measures: to get out of our growth rut, Canada needs radical tax reform


I'd need to read more on this, from the economists, to form a solid opinion.

It seems really complicated to implement.

That is an interesting topic and yeah complicated.  Canada falling behind on productivity was a topic when I did my economics degree 20+ years ago.  It wasn't fully understood then or known if it would continue, but it's steadily become a bigger problem over time.  In my opinion it is related to the tax structure and probably the difficulty of approval process.  The essential problem is basically to get businesses to reinvest in productivity enhancements.

When the dollar is low, they make huge profits and they redistribute to shareholders.

When the dollar is high, they retreat, even with capital amortization measures, or guaranteed loans, or any kind of grants.

There are various measures everywhere that don't incite companies to invest:
- environmental regulations not being strict enough.  The last time an industry was forced to modernize itself, it was the paper mill industry.  They fought tooth and nail against it, but in the end, they did comply with the environmental norms imposed by Quebec and Ottawa, and by the same token, became much more competitive than their American counterparts

- Our tech comes from foreign countries.  It's ultimately bought in US$ or Euros.  Huge penalty with a CAN$ that is often low.  If the CAN$ rises... our companies have trouble selling products to America, what was our biggest export market (well, still is, but we're trying to diversify away)

- There's often a resistance to change from entrepreneurs, big and small, they see technology as an expense, not an investment.  Especially if labor costs are passed down to consumers or are very cheap, like agriculture or fast food, due to the massive availability of tfw

- Speaking of agriculture.  For dairy & poultry, we have a quota system.  It protects smaller farms, it has a lot of good, but it has the adverse effect of preventing investments in technology.  Not so many dairy farms are equipped with milking robots, for example.  They feel the investment isn't worth it for the number of cows they have, they much prefer to manage humans rather than technology.  Compare to the pork sector, it's amazing how much more these farms can depend on human labor vs automation.  And work in the field, since the fields are smaller, makes automation impractical.  But I suppose out West, in the Prairies, automation for these parts can be a thing.

[viper37]

I like most of what I see/hear from Carney himself but I don't really trust his party that much... ultimately his success as PM will come down to how effectively the projects get done.

There's that, and it will depend on which projects he pushes.

There's a large consensus over defense spending.  So far, I haven't seen any mention of reaching 5%.  Like you, I don't think we can afford it right now.

The pay raise of 20% for our military will create a lot of expectation.  Better not fumble it.

[Bauer]

More competition makes companies more innovative too, which is probably a big cause of the lag.  Too many protections, and probably leads to the culture of change resistance.

I saw this automated greenhouse vid the other day, pretty cool. 

[viper37]

Yeah, that too.  We let oligopolies form in a lot of crucial sectors.

The government seems to have abandoned the idea of convincing another grocery chain of implanting itself in Canada.

And retail stores are in trouble worldwide. They totally under invested in e-commerce and got passed by Amazon and now Wal-Mart.

[Grey Fox]

Let's not forget that there's also the fact that after a while it's better to invest in real estate than to continue being a SMB.

[viper37]

Let's not forget that there's also the fact that after a while it's better to invest in real estate than to continue being a SMB.

With better preparation, the capital gains tax hike could have worked to alleviate that, by souring the real estate investment attractiveness.

You invest in real estate because 20 years from now, you're going to sell it for a massive gain that will only be taxed at 50% of its value while your SMB profits will always be taxed at 100% of their value.

But typical to the Libs, they managed to butch this by rushing their half baked plan and screwing all small time investors along with taxing the bigger fish and exacerbating our productivity problem by making all business capital gains tax taxable from the 1st dollar almost immediately, without prior notice.

[Bauer]

Cap gains tax on investment properties should be a no brainer.  I don't think they make sense for business sales though.  People should be rewarded for increasing value of their business.  Need to increase the entrepreneurial spirit/incentive.

I do think there's long been a kind of complacency in this country and we may now be in a period where's there's social license to make big reforms.  But it should be done thoughtfully, holistically...

[Grey Fox]

I disagree selling to American corporations is what got us into this mess in the first place. It needs to be curtailed.

[HVC]

If you really want to increase housing stock implement regular non cap gains tax on the sale of second homes. Probably cause economic chaos, but hey, cheap homes


*edit* increase purchase tax too, for double whammy

[Bauer]

I disagree selling to American corporations is what got us into this mess in the first place. It needs to be curtailed.

That's what foreign investment / takeover reviews are for though.

[crazy canuck]

What do you think the reviews are looking for?