When the federal government announced an increase in capital gains taxes in its recent budget, the hike was defended, in part, as a way to ensure the wealthiest Canadians pay their fair share.
But how exactly do we determine what a “fair share” is? Especially, as some data suggests, the wealthiest are already paying a larger share of the overall income tax burden.
“That word fair is completely subjective,” said Trevor Tombe, a professor of economics at the University of Calgary. “What’s needed in any kind of statement around what is or isn’t fair is clarity around what the person means when they say that word.”
Jake Fuss, director of fiscal studies at the Fraser Institute, echoed that a lot of these discussions are not informed by definitions, which is why the institute releases an annual report about Canada’s tax system that has found high-income Canadians are paying disproportionately more in taxes.
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Federal budget adds billions in spending, hikes capital gains tax
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Finance Minister Chrystia Freeland unveiled the government’s 2024 federal budget, with spending targeted at young voters and a plan to raise capital gains taxes for some of the wealthiest Canadians.
Fair share definition ‘vague’
“It’s kind of very vague in terms of what governments and policymakers actually mean by a fair share,” said Fuss.
In the 2024 budget, the federal government lays out its case for what it believes is not fair, particularly when it comes to taxes on capital gains.
“While all Canadians can benefit from the capital gains tax advantage, the wealthy, who tend to earn relatively more income from capital gains, disproportionately benefit compared to the middle class,” the budget said.
That’s why, in the interest of fairness, the government said it would increase the inclusion rate of the capital gains tax from one-half to two thirds on capital gains above $250,000 per year for individuals, and on all capital gains realized by corporations and trusts.
This, according to the government, would affect 0.13 per cent of Canadians with an average income of $1.4 million.
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While those tax changes may impact the very wealthiest, Fuss suggested that what is often overlooked is how much high income earners are actually paying in taxes.
The Fraser Institute’s 2023 report suggests that the top income-earning families — those making just under $250,000 — pay the majority of Canada’s taxes.
It found that the top 20 per cent of income earning families pay 61.9 per cent (that’s nearly two thirds) of all the country’s personal income taxes, while accounting for just under half of its total income.
As well, the study found that those top income earning families pay 53.1 per cent of total taxes.
Similar data was also compiled by Statistics Canada on those who pay higher income taxes. For example, in 2021, the top one per cent income group paid 22.5 per cent of all income taxes, but accounted for 10.4 per cent share of the country’s total income. The top 10 per cent income group paid 54.4 per cent of all income tax, but had a share of the country’s total income of 34.4 per cent.
Still, Allison Christians, the H. Heward Stikeman Chair in the Law of Taxation at McGill University, said some of those numbers are skewed because some top earners can shelter their income through creative tax planning.
According to Christians, the top earners also pay a much lower percentage of their income in consumption taxes than other earners.
“The question is not what percentage of income taxes is someone paying, but what is their relative contribution to the finances of Canada as a whole,” she said.
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Some business groups are worried that new capital gains tax changes could hurt economic growth. But according to Small Business Minister Rechie Valdez, most Canadians won’t be impacted by that change — and it’s a move to create fairness.
Income inequality a factor
Clement Nocos, director of policy and engagement at the Broadbent Institute, says the Fraser Institute figures, along with the Statistics Canada data, ignores the totality of actual income inequality.
Nocos referred to a recent Statistics Canada report showing thatthe wealthiest 20 per cent of Canadians account for more than two-thirds of the total net wealth.
As well, according to the data, the bottom 40 per cent of net income earners make up just under three per cent of total wealth.
“You lookat wealth as a whole of what people have and what contributes to inequality. That’s sort of what’s missing in these arguments,” he said. “Inequality when it comes to wealth is actually massive and growing.”
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
