Yes, the higher the capital gains—
Evidence of meeting #152 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was business.
A video is available from Parliament.
Evidence of meeting #152 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was business.
A video is available from Parliament.
Chief Executive Officer and Founder, GRIT Engineering, As an Individual
Yes, the higher the capital gains—
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Did I understand you correctly?
Chief Executive Officer and Founder, GRIT Engineering, As an Individual
Yes.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
That means that in all likelihood there would be fewer construction projects built across the country once this increase in the inclusion rate was passed into law.
Chief Executive Officer and Founder, GRIT Engineering, As an Individual
That's correct.
I mainly work with private development that is reinvesting back into our housing market. If there's less capital for them to reinvest into that market, then that means less housing.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Who builds those projects?
Chief Executive Officer and Founder, GRIT Engineering, As an Individual
It may be my neighbour or big developers. It depends on whether we're looking at—
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Who are the people on the ground, though, on the site project?
Some of them might be married to teachers. Some of them might be just construction guys or tradespeople who are making a living on the job. Is it fair to say that there will be fewer construction jobs across the country if the capital gains inclusion tax is increased? Do you think your firm will see less business because of that?
Chief Executive Officer and Founder, GRIT Engineering, As an Individual
I believe that if the capital gains rate is increased, there will be less money put back into projects that will support our communities, which means fewer jobs for the people in those communities.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Thank you.
There's one thing I want to clear up, because there's been a lot of talk about this $250,000 threshold. The reality is that the way the law is designed, if you're incorporated—and I presume most of your clients are incorporated—you don't get that $250,000 break in the inclusion rate, at 50%.
Are you aware of that?
Chief Executive Officer and Founder, GRIT Engineering, As an Individual
Yes.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
With all the discussion around this table about people benefiting from this great once-in-a-lifetime windfall when they're getting the inclusion rate at 50%, that doesn't include at all that small business owner or restaurant owner who's incorporated, who owns their business through a restaurant and is just trying to make a living in the restaurant business. It doesn't include any small business entrepreneur who happens to be incorporated. There are millions of them across the country. Many of them are your customers, I presume.
Therefore, it's just not accurate to say that everybody who makes a capital gain of $250,000 or less is taxed at an inclusion rate of only 50%.
Do you agree with that?
Chief Executive Officer and Founder, GRIT Engineering, As an Individual
I do agree with that.
One point, if I can expand, is that our small businesses put a ton of money back into communities. I certainly support the philanthropy point that's been raised here, but I also want to advocate for the small businesses. We are sponsoring soccer teams and baseball teams. We donate robotic computers to the local schools. The money that we make goes back into that community.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Okay.
I'm now going to turn over my time of just over a minute to my new colleague, Mr. Stewart, who wants to ask a question.
September 19th, 2024 / 4:35 p.m.
Conservative
Don Stewart Conservative Toronto—St. Paul's, ON
Thank you very much, and thank you, Mr. Chair.
I have a financial background; I'm a CFA charter holder. I'm also an engineer, so I think in systems.
I just came off an election in which I got to talk to people at their doors, not in a committee setting. Many people—not 40,000; they're not all living in St. Paul's—told me about their venture investments. They'll be taking them offshore where they'll be subject to lower taxes and where they won't be diluting their equity as much. Here, they have to compensate for the higher tax rate.
We're compensating people less. They're diluting themselves more. They're going to go to the U.S.
My question is this: In a country where we already have a progressive tax rate, which can be significant and heavy, are we not sacrificing our economy, our future economy, our GDP and our jobs by knocking up the inclusion rate to 66%?
Chief Executive Officer and Founder, GRIT Engineering, As an Individual
I believe we are damaging our economy and the money that will go back into it from small businesses. It hurts many people I know in small communities. It will make it more challenging for someone to move their grandparents in and retrofit that unit.
We need small businesses. We need to make it attractive for them.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Thanks, Chair.
Thank you to all of the witnesses for being here today. I found the testimony quite insightful, interesting and thoughtful, so I appreciate all of your efforts in preparing for today and being here today with us.
Ms. Yetman, it's good to see you again. Thank you for being here. I want to come to you.
Some folks have said to me, “Well, if the government wants to raise revenue and wants the wealthiest to pay more, why not simply increase the tax rate on the wealthiest? Our government has done that before.”
What would you say to that?
President, Canadian Teachers' Federation
This is just me. I'm not a tax expert; I'm a teacher. I taught science and art in the classroom.
However, I have read a bit about this and I believe we should be taxing the ultra-wealthy. I really believe this. There are inequalities in this country. I've said it already. We walk down Rideau Street and see people who are suffering. There shouldn't be anybody suffering in this country. This country is a rich country. To me, that is the way you invest in the common good.
I'm not a tax expert, for sure, but I know my members work very hard for their money. When a teacher has to work in the summer to make extra money, that tells you something about education in this country, unfortunately.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
In your introductory remarks, you spoke about—and I don't know if you said it this way—the fact that there is a need for government to invest and to support Canadians in a number of areas. I know you spoke about the food program in schools. My recollection is that you spoke about child care, housing and things like that.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Can you talk a bit about why you think investments in these areas are so important? I know you spoke about the food program earlier, so you don't need to repeat that.
