In recent years, regardless of whether it is the new deal of the Canadian Federation or the new policy of British Columbia, once the "cheese" of some people is moved, it will inevitably cause public outrage at the first time. For example, the new rules for short-term rentals proposed by BC last year, and the new capital gains tax proposed by the federal government a few days ago:
If the annual capital gains of an individual or enterprise exceed 250,000 yuan, the proportion of capital gains added to other income tax returns will increase from 50% to 66.7%. For some wealthy people, the extra income tax paid every year can easily be tens of thousands.
Although Fang Huilan, Trudeau, and even NDP leader Singh all said that "the new capital gains tax is a manifestation of Canada's tax fairness" and said that the rich should pay more, the rich and business elites obviously do not buy it.
1,000 business people have signed a joint letter
More than 1,000 business people under the Canadian Innovators Council (CCI) recently signed a joint open letter directly demanding that "the Trudeau government abolish the new capital gains tax".
CCI President Benjamin Bergen said bluntly: "We thought that the federal government would come up with incentives in the 2024-2025 Budget to revive the Canadian economy and allow business people to shine better in Canada, but the result was completely opposite. ”
Instead of supporting Canadians, the federal government has made them pay more taxes to rob the rich and help the poor. In Benjamin Bergen's view, the new capital gains tax undermines Canada's productivity and undermines investment entrepreneurship in Canada.
What's more, the new capital gains tax will make Canada, which is already difficult to retain talent, face a massive loss of talent again, such as some companies will move their operations elsewhere.
Shopify President: The federal government is running counter to the goal
The representative of the business community is undoubtedly Tobi Lutke, the founder of Shopify, a Canadian "national treasure" enterprise, and Harley Finkelstein, the president. Among them, Harley Finkelstein directly "sprayed" on Twitter:
"We need to do everything possible to make Canada a popular place for entrepreneurs, and yet the federal government is doing the opposite of that goal, instead of encouraging entrepreneurs, it punishes them, and this tax on the rich doesn't make sense." ”
"It's not a tax on the rich, it's a tax on innovation, it's about risk-taking, it's about courage, and that's going to lead to a brain drain to the United States. Bill Morneau, Canada's former federal finance minister, was also one of the opponents, saying, "This will make Canadian investors and entrepreneurs very uneasy." ”
It may seem that taxes are not so "outrageous", but in the eyes of entrepreneurs and wealthy people, this may be just the first big knife to be waved at them, just the beginning. As long as the housing crisis does not continue to ease, they will face more squeeze in the future.
The chilling effect makes the enterprise even worse
Although Federal Finance Minister Fang Huilan said that the new capital gains tax will only target the top 0.13% of Canada's wealthy people, about 30,000 people, she kept silent about another statistic: as many as 307,000 businesses will be affected!
Benjamin Bergen, chairman of the CCI, said this would have a chilling effect in the corporate world – some companies that look good are already suffering from rising labor costs, difficulty in obtaining funding in a high-interest rate environment, and now having to pay more taxes, making the challenge even greater.
And these excellent enterprises are the "leaders" that promote the improvement of Canadian productivity and the speed of the Canadian economy. If the federal government discourages them, the consequences will be as Shopify's president Harley said: entrepreneurs go south and move to the United States.
Benjamin Bergen warns: "The new capital gains tax is an insult to a number of highly skilled people in innovative industries who may risk joining startups to gain opportunities or even accept lower wages for the appreciation of their stock options. ”
Step on the accelerator and brake on the other
The paradoxical approach of reviving the economy while taxing the rich and corporations has been likened by Kelly, president of the Canadian Federation of Independent Enterprises, to "stepping on the gas pedal and applying the brakes at the same time, sometimes with a strong throttle, sometimes with a strong brake." ”
Dennis Darby, president and CEO of the Canadian Manufacturers and Exporters Association, is also disappointed: "What the federal government urgently needs to do is to provide more tax breaks for businesses, such as carbon rebates for small businesses, and find ways to keep them instead of driving them away." ”
"Over the years, Canada has had a lot of difficulties in attracting investment, such as the ban on overseas buyers and various investment-related taxes, and now the situation is only going to get worse. ”
Asaria Asaria, founder of Transformer Lab Canada, said in an interview with CBC: "A really good government is about how to make a better life for all Canadians, not how to squeeze the rich and prevent them from making more money." ”
Proponents of taxation argue that there is no need to make a fuss
In the business world, despite the opposition, there are some voices of approval. For example, Lindsay Tedds, an associate professor of economics at the University of Calgary, argues that the business community has reacted too violently to make a fuss.
"The impact on the country's talent is exaggerated, because the vast majority of companies, like the vast majority of people, do not have as high capital gains, and they are the mainstay of Canada. ”
"And, in the long run, once the quality of life of young people improves, Canada will be more productive and more sustainable," Lindsay said, "I can't say it's been successful, but at least it's not nothing." ”
As for the "abolition of the new capital gains tax" that the business people who signed the letter hope for, in fact, everyone understands that this is just wishful thinking