It’s obvious that the Liberal Party has pretty much all the same band members and playlist as it had before, so it’s not out of line to remind Canadians of some very controversial tax policies that have been considered by them during their time in power.
The first is a home equity tax . The target appears to be older Canadians who have paid off their homes and have equity . Last summer, there were a number of reports and videos floating around that various Liberal party members, including former prime minister Justin Trudeau, had met with a think tank called Generation Squeeze to discuss “generational fairness” issues, including the introduction of a home equity tax.
Generation Squeeze seems to think that one of the ways to enable younger Canadians to afford a home is to go after older people who have worked hard to pay off their homes.
“Gen Squeeze believes that it’s time to protect real shelters, not tax shelters. It’s unfair to sustain a system in which the hard work Canadians do every day in their jobs is taxed more than the wealth homeowners gain from rising prices while they sleep and watch TV,” it once said on its website. “The first step is putting a price on housing inequity by adding a modest surtax on homes valued at more than $1 million. This surtax will apply only to the top 12 per cent of high-value homes.”
As I have explored before, a home equity tax is a ridiculous idea rooted in victimhood policy. Canadians already pay a long list of taxes on their homes, such as municipal property taxes and GST/HST on new builds, renovations and utilities.
Prior to the suspension of the carbon tax, they also paid significant amounts of that tax on home heating. In addition, if the eventual disposition of their home or rental property does not qualify for the principal residence exemption, they will pay capital gains taxes to the extent the property has appreciated.
Will a home equity tax make an appearance under a Mark Carney-led government ? At this point, with huge, Carney-promised spending , anything is possible. Would Canadians support it? I highly doubt it.
Another thing that left-of-centre progressives often call for is a wealth tax , which by definition is a tax on the assets of an entity (often an individual). A wealth tax can take many forms, but its general policy or purpose (other than to raise taxation revenues) is to attempt to prevent extreme wealth accumulation and redistribute it to the less wealthy.
Wealth taxes were once in vogue, but the number of countries that currently have them in their tool belts has significantly declined. Currently, only four countries have a net wealth tax and another four deploy a wealth tax on the value of certain assets (usually real estate).
The NDP’s 2021 election policy called for a one per cent wealth tax on a person’s net assets over $10 million, which the Parliamentary Budget Officer estimated would cost Canadians more than $60 billion over five years. Currently, the policy platforms for the NDP do not call for a wealth tax, but it wouldn’t surprise me to see such a policy put forward by the NDP later on in the campaign.
For the Liberals, it came to light in 2022 that the Prime Minister’s Office (PMO) was actively exploring the feasibility of a wealth tax in 2021. There were a number of Privy Council, PMO and Department of Finance people who were actively exploring such a proposal and cheerleading it.
It has obviously not been introduced, but would it be surprising if the Liberals took another look and introduced it under a Carney government? Wouldn’t surprise me in the least bit. Again, the overall components of the band haven’t changed except for its new lead singer, who is just as ideologically driven as the old singer.
Would it be a good idea to introduce a wealth tax? Absolutely not. It would accelerate the already steady stream of capital and successful Canadians leaving Canada . For example, France abandoned its wealth tax in 2017 to stem the tide of more than 60,000 successful French people who left. It was found to be costly to administer and a revenue-raising loser.
What about the consumer carbon tax? Partisan Liberals are quick to cheer Carney for suspending the carbon tax, but Conservative Leader Pierre Poilievre should be the one to thank for its suspension. In addition, it’s worth noting that the carbon tax legislation has not been repealed. It would be very easy for a Carney-led government to reintroduce it in the future while also significantly increasing or expanding the industrial carbon tax as well.
Would that surprise me? Nope, not in the least. Carney is a well-known climate ideologue who lets his climate obsessions get in the way of common sense.
Live Q&A: The election, the trade war and your personal finances Joe Oliver: Fool me once, shame on you. Fool me four times? Seriously?As we head into the final stretch, don’t be fooled by the fresh face behind the mic. Carney may be new to the stage, but the Liberal playlist hasn’t changed: it’s still tax hikes, wealth grabs and climate crusades masquerading as policy. Behind every photo op and so-called day off to deal with Trump is a recycled idea that’ll cost Canadians dearly.
Same band, new singer, same old tax tunes. Time to cut the mic.
Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at [email protected] and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody.
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