PITY POOR VOTERS

𝐏𝐈𝐓𝐘 𝐏𝐎𝐎𝐑 𝐕𝐎𝐓𝐄𝐑𝐒: Pity poor Canadian voters heading to the polls on Sept. 20 in an election we don’t want and certainly cannot afford at a cost of more than half a billion dollars.

Promises, promises, promises. The list is staggering and confusing, as mainstream parties and fringe groups vie for our vote. The nagging reality is none of these promises will be kept. But more worrisome are the far-right agitators showing up at rallies, throwing stones and slurs in an attempt to undermine our democratic rights and freedoms, just like the insurgents south of the border

So, while we watch in disbelief as this Rocky Horror Political Show unfolds and each party leader is guilty of misleading voters with idle promises and no regard to how the taxpayer will pay – let’s take a closer look at some of the most pressing issues Canadians face today, and possible solutions.

One of the hottest issues in this election is how the dream of home ownership has gone up in smoke, and our children cry they will never be able to afford a home.

Believe it or not, there once was a day in this fair land when the dream of owning a home was within reach for most Canadians. But, after years of listening to real estate gurus brag that globally Canadian real estate was cheap - we are now home to the most expensive property values in the world. Take Vancouver, where the average price is expected to top $1.2 million next year and where home values already eat up 13.8 times buyers’ median income. Vancouver is now the second most expensive market in the world, next to Hong Kong which has held the title for most expensive for years. Toronto, where the average price hit over $1 million this year to eat up 9.9 times buyers’ median income, is not far behind to rank in fifth place.

What’s to blame? Pundits argue there is not enough supply for demand, especially during this pandemic which lit a fire under an already overheated market, as more buyers moved out of cities to work remotely from home. Also, supply has not kept up with the influx of new immigrants. But it goes deeper. Foreigners have been buying up our property. Speculators have been renovating and flipping homes, a frenzy fueled by cheap mortgage rates. And then there’s money laundering. Anti-corruption experts warn up to $100 billion in ill-gotten gains from criminal activity is being laundered in Canada’s real estate market every year, while an expert panel studying the B.C. market put the value at $46.7 billion in 2018 alone, to push up Canadian prices by as much as 7%.

And how fair is this? While Canada’s market remains wide open to all foreigners, in China a foreigner can only buy one property, and it must be residential. Also, in Beijing, you must pay taxes and social security for at least five years before you can buy a property.

On the election trail, our leaders are promising quick fixes ranging from tax-free Home Savings Accounts, slashing CMHC mortgage insurance rates, re-introducing 30-year CMHC-insured mortgages, doubling the Home Buyers Tax Credit to $1,500 - to building more affordable homes, a Home Buyers’ Bill Right making transactions more transparent, and a two-year moratorium on foreign buyers.

Years ago, I advocated for the Home Buyers’ Plan allowing RRSP money to be used tax free for a down payment, but with the stipulation the money had to be repaid into the RRSP, plus I advocated for the 5% down payment plan. So, I’m all for any plan that helps keep the dream of home ownership alive, especially for young families struggling to afford to get into this overbaked market.

But beware: Though leaders are smart enough to steer clear of a new capital gains tax on our principal residences, the threat has not gone away. This bonehead idea was advocated by Generation Squeeze, a group of younger Canadians who took part in a UBC study, supported by a grant from CMHC, to look at housing wealth and inequality.

My message: Hands off our homes – which are already among the highest taxed in the world, and the biggest asset for many Canadians heading into retirement.

Think about it: Almost 40% of what an average family earns in Canada goes to paying total taxes, with many of these taxes (payroll, health, sales, property, fuel, carbon, etc.) paid for in after-income tax dollars. A capital gains tax will mean even higher income taxes. For example, let’s say you paid $500,000 for your home, and later sold it for $650,000. With a new capital gains tax, 50% of the gain or $75,000 would be added to your income, and taxed at your income tax rate. Meanwhile, you are already paying high taxes on your home –everything from property (among the highest in the world) education, land transfer taxes to HST on new builds (with possible rebates), real estate commissions and legal fees.

Enough. Here’s what I believe is a better solution: Immediately, close our market to foreign buyers, unless they plan to live and pay taxes here. Put the money laundering thugs in jail by tightening our lax laws, and clamp down on home flippers who avoid paying tax by declaring it’s a principal residence.

Also make Money 101 mandatory in all our schools, so our children will learn how to save for a down payment and not become slaves to expensive consumer debt.

A side note: The Bank of Canada is now warning higher interest rates are on the way – which will be a blow to over-leveraged Canadians who owe almost $2 trillion in mortgage debt and home equity lines of credit. This could be the prick to burst the bubble.

Next issue: How do you kill off a free, democratic economy? Kill off the young workers.

A scourge of illicit drugs (fentanyl, meth and synthetic opiates) has killed 23,000 Canadians in the past five years, taking more lives than guns incidents and car accidents, and leaving a wake of the walking dead, with acute mental health and addiction problems

Politicians espouse more drug consumption sites and free access to the overdose drug, Naloxone.

But we need more: Decriminalize simple possession, declare war on the pushers, beef up policing at our borders, and clamp down on the money laundering of the drug cartel’s criminal gains.

Next issue: Big players hosing the little guy:

From big banks to a growing oligopoly in the telecommunications industry, poor Canadians are being gouged. For example, our cell phone bills alone are among the highest in the world.

Some leaders are espousing a new profit tax on our big banks. Let’s be real. The banks will merely pass on the additional cost to us.

Here’s what we need: A Consumer Bill of Rights in Canada, which caps gouging rates and excessive fees. And we need a new Competition Watchdog in Ottawa, with sweeping powers to bust up oligopolies and usher in true competition to drive down rates. But instead, we watch in horror as Rogers plans to swallow up Shaw Communications, leaving two dominant players to hose our pockets more.

And speaking of hands in our pockets – it’s time to rein in the taxman. The Canada Revenue Agency (CRA) has a reputation of going after the little guy or as some refer to low-lying fruit – like the self-employed and gutsy entrepreneurs who risk it all to start a new business with no safety nets, like EI to fall back on. I know the heavy handedness of the CRA. Since I left my job at Sun Media, where I was the tax-crusading Money Editor, who led revolts like my Stop the Tax Madness rallies – I have been a victim of relentless audits. One was a mistake made by my accountant, but the others, I am told, were random.

Meanwhile, five years after the Panama Papers revealed tax cheats avoided paying $2.6 trillion in taxes through sophisticated offshore havens, with almost 900 identified as Canadians - the CRA has not laid one single criminal charge, and recouped only $21 million, while other countries have filed tax evasion charges, secured convictions and recouped hundreds of millions.

And this interesting: Stephen Bronfman, who was a chief fundraiser for Justin Trudeau and a close friend who helped Trudeau get the plum PM job, is named in the Paradise Papers, which identifies $1.4 trillion in unpaid taxes through tax havens used by the idle rich, including public figures, celebrities, sports stars, etc.

One last burning issue: Canadians deserve to know how this pandemic began – and why a high ranking officer in China’s People’s Liberation Army is linked to the scandal at Canada’s high security infectious disease laboratory in Winnipeg, where two Chinese scientists were fired in January and sent home. These two scientists were involved in the shipping of Ebola and Henipah viruses from the National Microbiology Laboratory in Winnipeg to the Wuhan Institute of Virology in China in 2019.

What’s criminal is how Trudeau’s government went to court in June to block the release of any details from this scandal. Then last month, with the heat on, the government dropped the order.

Believe me, the world has yet to suffer the full brunt of this pandemic scourge. We need the truth.

Now, get out there, hold your nose and VOTE.

Do You Have A Will?

𝓓𝓸 𝓨𝓸𝓾 𝓗𝓪𝓿𝓮 𝓐 𝓦𝓲𝓵𝓵?

As the saying goes, if there’s a will, there’s a way. Well, be warned: Without a will, you could end up losing your way, with governments meddling in your affairs.

November is Make A Will Month, so let’s talk about this important subject.

I often tease my kids saying if I only knew my “best before date”. Or, even more important, I’ll quip I want to know my “expiry date.” Bottom line is none of us know when the grim reaper will come calling – and all too often we are guilty of putting off estate planning, including making sure we have a legal and binding will, to ease the burden on family members when we do expire.

David Newman, founder and principal director of Fiscal Agents Savings and Investments in Oakville, says estate planning is a key part of smart financial planning, and completing a will, plus selecting executors and powers of attorney for finance and health, will offer families peace of mind.

“Implementing a comprehensive, well-designed estate plan can represent true peace of mind especially for maturing people who want to enjoy their remaining years in the company of old friends and family,” says Newman. Fiscal Agents, Canada’s renowned independent deposit brokerage, offers free downloads of their financial planning guides to help in the task. Visit, www.fiscalagents.com/linda On this landing page you will myself and Newman offering advice on a wide range of financial topics. Or for just estate planning, visit https://mailchi.mp/fiscalagents.com/estateplanningorganizer

So, let’s do a quick estate planning refresher.

What is a will? Simply put, it is a person’s will in a written document that sets out the person’s wishes about how his or her estate should be taken care of and distributed after death. It takes effect when the person dies.

What is a living will? This is sometimes used to refer to a document in which you write down what you want to happen if you become ill, and cannot communicate your wishes about treatment.

Many people ask, can I write my own will? Yes, there are many online guides, where you can put your wishes on paper, but my advice is always get legal advice. A trusted estate planning lawyer can become your best friend.

What is an estate? An estate is the property that a person owns or a legal interest in. The term is often used to describe assets and liabilities left by a person after death.

What is a trust? A trust is created to hold property or assets for the benefit of a particular person called the beneficiary, and is often used for minors. It is managed by a person called a trustee, who has an obligation to carry out the deceased’s wishes.

What is the executor? This is the person you appoint to carry out your wishes after death, and is responsible for distributing your estate to the beneficiaries. Fiscal Agent’s Newman warns this can be a daunting task, and will take time and knowledge. For example, if assets are distributed to beneficiaries without outstanding taxes being paid first, the executor will be on the hook.

What about powers of attorney for finance and health? You should pick people you trust to carry out these duties. If you become incapacitated, their responsibility is to make decisions on your behalf for your finances and health. Newman advises, if possible, do not pick the same person for both finance and health

There is so much more to learn, so get started now. Newman sums it up: “For most people, estate planning is a difficult subject to discuss and to plan for, because it forces us to come to terms with our own mortality. Yet it is something you need to discuss openly with your loved ones today, because you can’t do so after you’re gone.”

We Need A Survival Summit

𝓦𝓮 𝓝𝓮𝓮𝓭 𝓐 𝓢𝓾𝓻𝓿𝓲𝓿𝓪𝓵 𝓢𝓾𝓶𝓶𝓲𝓽

My first Survival Summit was held back in 1994 when Canada was struggling with a nasty recession and our country was fast tracking to hit the Debt Wall.  By the final quarter of 1996 we hit that wall, with total government debt reaching an unsustainable high of 90.26% of GDP (gross domestic product or economic growth.)

Linda Leatherdale, Survival Summit at the King Edward Hotel.

We convened in a room at the King Edward Hotel in downtown Toronto, with the Canadian Taxpayers’ Federation (CTF) Debt Clock sitting in the lobby, reminding all of our dire fiscal situation. In our meeting room were brilliant minds from the CTF, the Canadian Federation of Independent Business, the Canadian Bankers’ Association, the Canadian and Ontario chambers of commerce, and, of course, editorial and management brass from the Toronto Sun, who sponsored this important gathering. We also brought in feisty Mississauga Mayor Hazel McCallion, and New Zealand’s then labour finance minister, Sir Roger Douglas, who steered his country off a collision course with debt.

Our group came up with Seven Summit Solutions. We then invited federal finance Minister Paul Martin to our second gathering to hear our solutions. At first, he rejected our ideas. But then, as Ottawa was preparing the 1996 budget, out of the blue I got a call from Liberal MP Dan McTeague who said Martin wanted to meet with me.

Behind closed doors, Martin revealed he was going to grant us our biggest wish.  He would balance the budget and lower taxes, while weaning Canada off its insatiable appetite for debt.  Martin, to this day, is my hero.

Fast forward to 2020, and the year of the Great Pandemic.

Unprecedented times take unprecedented measures. The world’s worst nightmare, a global COVID-19 pandemic, saw global  leaders open up budgets and spend, spend, spend, to help families and businesses financially survive this crisis, as lockdowns gripped nations.

Here in Canada, the warnings began.  Our national deficit for 2020-21, originally projected to be $34.4 billion, would jump to $343.2 billion – a level not seen since the Second World War. Ottawa’s net debt (combined annual deficits) would jump to $1.2 trillion, or 49% of GDP (gross domestic product or economic growth).  But here’s what’s so scary.  Total government debt is Canada, which includes the provinces, is projected to hit 97% of GDP by the end of this year – a level higher than our 1990s crisis. That’s $24,464 owed by each Canadian.  And that debt takes a whopping $75 million a day in interest payments.

Yes, the landscape has changed from our 1990s crisis, compared to today’s crisis.  The biggest is borrowing is so cheap, with the Bank of Canada rate hovering at a record low of 0.25%.  That’s why our leaders are telling us, “don’t worry, be happy.”  We will survive. But, what if rates rise?  Then, there’s another crisis looming. Canadians, who were once savers, are now addicted to debt – owing a whopping $1.7 trillion. For every $1 we have in disposable income, we owe $1.77.

Canadians spend more than 45% of our income to pay taxes to all levels of government – many which are paid for in after income-tax dollars. Yet, the solution our leaders are looking at are higher taxes, including a new home equity tax on our principal residences – which for most of us is our biggest asset, especially in retirement.  Believe me, Canadians cannot afford higher taxes.

As I said, unprecedented times, takes unprecedented measures, and leaders who will listen. So, I want to hear from you, and have your voice heard at our next Survival Summit. This is a time for brilliant minds.  This is a time to have your voice heard.