News
For Hong Kongers, Canada is beaten path out of China’s grip
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By Sarah Wu
TORONTO (Reuters) – A second generation of Hong Kongers is heading to Canada for refuge from political uncertainty, but unlike their parents in the 1980s and 1990s, this time seems for good.
Cities such as Vancouver and Toronto are a magnet for those looking to escape as China tightens its grip on the territory of 7.5 million people. Some 300,000 already have Canadian citizenship after many families initially moved there ahead of Hong Kong’s return from British to Chinese rule in 1997.
Back then, many families separated, with one parent staying in Hong Kong for work, usually fathers who were dubbed “astronauts” as they soared through the sky on visits. Among those who went to Canada, many eventually returned, lured by the booming economy and what still seemed to be a relatively free environment.
Things have changed.
With recent pro-democracy protests virtually snuffed out and Beijing enshrining control last year via a national security law, bags are being packed once more.
“Staying in Hong Kong is not an option anymore,” said Maria Law, 39, who moved to Vancouver last year with her two girls ahead of her husband. “I’d rather have a free future for my daughters instead of making money while they have to keep their mouths shut.”
For Law, a former flight attendant, history has repeated itself.
She is part of a rare cohort of double political emigres.
Taken to Vancouver when she was 12, Law remembers daily speakerphone calls from the living room with her father, who was earning the family bread as a hotel chef back in Hong Kong.
Enthusiasm for the calls waned as it became clear he was staying. Yet like many such “satellite” children, separated from one or both parents, Law eventually followed in her father’s footsteps to return to Hong Kong herself for work in 2004.
“When I was young, I asked my father why I had to move. But now I am in his position, I understand,” she said. “He sacrificed more than we did. He’s the one who had to be alone.”
LEARNING FROM MISTAKES
Thanks to Canada‘s liberal immigration system, 335,646 Hong Kongers moved there between 1984 when Britain’s handover was declared and 1997, according to the Canadian International Council think tank. That was most of the half-million exodus.
This time, Britain may take most Hong Kongers as it offers visas to potentially 300,000 people.
The flow to Canada may also be large, with existing Canadian passport-holders in Hong Kong from the first wave and new immigration pathways for the younger generation.
A Hong Kong government spokesman said concerns about erosion of freedoms were “totally unsubstantiated” and that the security law had stopped chaos. “People’s decisions to remain in or leave Hong Kong, or anywhere for that matter, are based on many factors including job situation, schooling, business and investment opportunities or personal/family reasons,” he added.
China’s Hong Kong and Macau Affairs Office, and the Hong Kong Liaison Office, Beijing’s top representative body, did not respond to requests for comment.
The scars of the first uprooting are informing the second.
“I’m not going to make the same mistakes as my parents, like having a satellite family,” said Tsang, a 36-year-old legal compliance officer who did not want to give her first name because she was yet to resign from work in Hong Kong.
Her parents’ marriage did not survive separation, but Tsang hopes to do better. Her daughter and husband move to Vancouver this month and she is to join them after selling their home.
In Law’s case, she is eagerly waiting for her husband, for whom it is a wrench to leave his wider family and career as a university IT officer, to rejoin the family in Vancouver.
In October, she gave him the sponsorship paperwork and urged him not to miss their girls’ growing up. To her relief, he returned the forms on Jan. 1. While he waits to travel, he watches his younger daughter’s growth spurt via a screen and waits for both girls to say hello before he sleeps.
It is hard to track exactly how many Hong Kongers are moving to Canada as so many can travel freely between the two.
New visa applications from Hong Kong rose more than 20% to 10,819 in 2020, Canadian immigration says.
The Hong Kong government did not have data, but the Security Bureau estimated 7,000 people may have emigrated in 2019, 1,300 to Canada. However, that methodology is based only on applications for documents showing no criminal records, which many departing Hong Kongers do not in fact request.
BUNS AND NEWSPAPERS FROM HOME
Social media posts about paperwork, schools, real estate and jobs abound for Hong Kongers returning to Canada.
One frequently-asked-questions group by the “Return Vancouver” Facebook page has 5,800 members.
Miu Chung Yan, a University of British Columbia professor of social work, and himself from Hong Kong, said those returning to Canada were often giving up better-paying jobs at home but had long known they would return for children’s education or retirement.
Violent scenes of blazing streets and protesters clashing with police in 2019, plus China’s subsequent response, hastened their decision-making.
Pre-handover immigrants created ethnic enclaves with strip malls featuring Hong Kong-style cafes, Cantonese-speaking dentists and Chinese supermarkets.
In Richmond, a Vancouver suburb, 21.9% of residents counted Cantonese as their first language, followed by 20% for Mandarin, the main language in the rest of China, in a 2016 census.
In Markham, just north of Toronto, the vast Pacific Mall shares the same name as Hong Kong’s centrally-located Pacific Place shopping centre.
Pacific Mall’s corridors bear the names of major arteries in Hong Kong, such as Hollywood Road or Hennessy Road.
In nearby plazas, those nostalgic for Hong Kong fare can pick up warm pineapple buns with a cold slab of butter and Chinese-language newspapers Sing Tao and Ming Pao.
Jason, who plans to move back to Canada with his wife and nine-year-old twins, acknowledges he is “a little bit confused” about his identity.
His father moved to Hong Kong during Mao Zedong’s rule after four of 10 siblings starved to death in mainland China, he said. His parents sent him to high school in Canada in 1993 at 13.
But in 2001, his father’s construction company was struggling and he had to drop out of college to return to Hong Kong, where he later became a furniture salesman.
Over the years he noticed Hong Kong transforming: the luxury flats he fitted were increasingly owned by mainland Chinese. Mandarin became the more common language with customers in the famous IFC and ICC commercial towers.
“It’s kind of sad,” said Jason, who did not give his full name as he is yet to tell his twins about leaving. “Every time I have a gathering with friends or chit-chat with colleagues, the only topic is ‘where are you going to live’?”
(Reporting by Sarah Wu in Toronto; Editing by Marius Zaharia and Andrew Cawthorne)
More money will land in the pockets of Canadian families on Friday for the latest Canada Child Benefit (CCB) installment.
The federal government program helps low and middle-income families struggling with the soaring cost of raising a child.
Canadian citizens, permanent residents, or refugees who are the primary caregivers for children under 18 years old are eligible for the program, introduced in 2016.
The non-taxable monthly payments are based on a family’s net income and how many children they have. Families that have an adjusted net income under $34,863 will receive the maximum amount per child.
For a child under six years old, an applicant can annually receive up to $7,437 per child, and up to $6,275 per child for kids between the ages of six through 17.
That translates to up to $619.75 per month for the younger cohort and $522.91 per month for the older group.
The benefit is recalculated every July and most recently increased 6.3 per cent in order to adjust to the rate of inflation, and cost of living.
To apply, an applicant can submit through a child’s birth registration, complete an online form or mail in an application to a tax centre.
The next payment date will take place on May 17.
News
Capital gains tax change draws ire from some Canadian entrepreneurs worried it will worsen brain drain – CBC.ca
A chorus of Canadian entrepreneurs and investors is blasting the federal government’s budget for expanding a tax on the rich. They say it will lead to brain drain and further degrade Canada’s already poor productivity.
In the 2024 budget unveiled Tuesday, Finance Minister Chrystia Freeland said the government would increase the inclusion rate of the capital gains tax from 50 per cent to 67 per cent for businesses and trusts, generating an estimated $19 billion in new revenue.
Capital gains are the profits that individuals or businesses make from selling an asset — like a stock or a second home. Individuals are subject to the new changes on any profits over $250,000.
The government estimates that the changes would impact 40,000 individuals (or 0.13 per cent of Canadians in any given year) and 307,000 companies in Canada.
However, some members of the business community say that expanding the taxable amount will devastate productivity, investment and entrepreneurship in Canada, and might even compel some of the country’s talent and startups to take their business elsewhere.
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.
Benjamin Bergen, president of the Council of Canadian Innovators (CCI), said the capital gains tax has overshadowed parts of the federal budget that the business community would otherwise be excited about.
“There were definitely some other stars in the budget that were interesting,” he said. “However, the … capital gains piece really is the sun, and it’s daylight. So this is really the only thing that innovators can see.”
The CCI has written and is circulating an open letter signed by more than 1,000 people in the Canadian business community to Trudeau’s government asking it to scrap the tax change.
Shopify CEO Tobi Lütke and president Harley Finkelstein also weighed in on the proposed hike on X, formerly known as Twitter.
We need to be doing everything we can to turn Canada into the best place for entrepreneurs to build 🇨🇦<br><br>What’s proposed in the federal budget will do the complete opposite. Innovators and entrepreneurs will suffer and their success will be penalized — this is not a wealth tax,…
—@harleyf
Former finance minister Bill Morneau said his successor’s budget disincentivizes businesses from investing in the country’s innovation sector: “It’s probably very troubling for many investors.”
Canada’s productivity — a measure that compares economic output to hours worked — has been relatively poor for decades. It underperforms against the OECD average and against several other G7 countries, including the U.S., Germany, U.K. and Japan, on the measure.
Bank of Canada senior deputy governor Carolyn Rogers sounded the alarm on Canada’s lagging productivity in a speech last month, saying the country’s need to increase the rate had reached emergency levels, following one of the weakest years for the economy in recent memory.
The government said it was proposing the tax change to make life more affordable for younger generations and fund efforts to boost housing supply — and that it would support productivity growth.
A challenge for investors, founders and workers
The change could have a chilling effect for several reasons, with companies already struggling to access funding in a high interest rate environment, said Bergen.
He questioned whether investors will want to fund Canadian companies if the government’s taxation policies make it difficult for those firms to grow — and whether founders might just pack up.
The expanded inclusion rate “is just one of the other potential concerns that firms are going to have as they’re looking to grow their companies.”
He said the rejigged tax is also an affront to high-skilled workers from low-innovation sectors who might have taken the risk of joining a startup for the opportunity, even taking a lower wage on the chance that a firm’s stock options grow in value.
But Lindsay Tedds, an associate economics professor at the University of Calgary, said the tax change is one of the most misunderstood parts of the federal budget — and that its impact on the country’s talent has been overstated.
“This is not a major innovation-biting tax change treatment,” Tedds said. “In fact, when you talk to real grassroots entrepreneurs that are setting up businesses, tax rates do not come into their decision.”
As for productivity, Tedds said Canadians might see improvements in the long run “to the degree that some of our productivity problems are driven by stresses like housing affordability, access to child care, things like that.”
‘One foot on the gas, one foot on the brake’
Some say the government is sending mixed messages to entrepreneurs by touting tailored tax breaks — like the Canada Entrepreneurs’ Incentive, which reduces the capital gains inclusion rate to 33 per cent on a lifetime maximum of $2 million — while introducing measures they say would dampen investment and innovation.
“They seem to have one foot on the gas, one foot on the brake on the very same file,” said Dan Kelly, president of the Canadian Federation of Independent Business.
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.
A founder may be able to sell their successful company with a lower capital gains treatment than otherwise possible, he said.
“At the same time, though, big chunks of it may be subject to a higher rate of capital gains inclusion.”
Selling a company can fund an individual’s retirement, he said, which is why it’s one of the first things founders consider when they think about capital gains.
Mainstreet NS7:03Ottawa is proposing a hike to capital gains tax. What does that mean?
Tuesday’s federal budget includes nearly $53 billion in new spending over the next five years with a clear focus on affordability and housing. To help pay for some of that new spending, Ottawa is proposing a hike to the capital gains tax. Moshe Lander, an economics lecturer at Concordia University, joins host Jeff Douglas to explain.
Dennis Darby, president and CEO of Canadian Manufacturers & Exporters, says he was disappointed by the change — and that it sends the wrong message to Canadian industries like his own.
He wants to see the government commit to more tax credit proposals like the Canada Carbon Rebate for Small Businesses, which he said would incentivize business owners to stay and help make Canada competitive with the U.S.
“We’ve had a lot of difficulties attracting investment over the years. I don’t think this will make it any better.”
Tech titan says change will only impact richest of the rich
Toronto tech entrepreneur Ali Asaria will be one of those subject to the expanded capital gains inclusion rate — but he says it’s only fair.
“It’s going to really affect the richest of the rich people,” Asaria, CEO of open source platform Transformer Lab and founder of well.ca, told CBC News.
“The capital gains exemption is probably the largest tax break that I’ve ever received in my life,” he said. “So I know a lot about what that benefit can look like, but I’ve also always felt like it was probably one of the most unfair parts of the tax code today.”
While Asaria said Canada needs to continue encouraging talent to take risks and build companies in the country, taxation policies aren’t the most major problem.
“I think that the biggest central issue to the reason why people will leave Canada is bigger issues, like housing,” he said.
“How do we make it easier to live in Canada so that we can all invest in ourselves and invest in our companies? That’s a more important question than, ‘How do we help the top 0.13 per cent of Canadians make more money?'”
More money will land in the pockets of Canadian families on Friday for the latest Canada Child Benefit (CCB) installment.
The federal government program helps low and middle-income families struggling with the soaring cost of raising a child.
Canadian citizens, permanent residents, or refugees who are the primary caregivers for children under 18 years old are eligible for the program, introduced in 2016.
The non-taxable monthly payments are based on a family’s net income and how many children they have. Families that have an adjusted net income under $34,863 will receive the maximum amount per child.
For a child under six years old, an applicant can annually receive up to $7,437 per child, and up to $6,275 per child for kids between the ages of six through 17.
That translates to up to $619.75 per month for the younger cohort and $522.91 per month for the older group.
The benefit is recalculated every July and most recently increased 6.3 per cent in order to adjust to the rate of inflation, and cost of living.
To apply, an applicant can submit through a child’s birth registration, complete an online form or mail in an application to a tax centre.
The next payment date will take place on May 17.
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