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