i can haz mad

Maybe the real treasure was the anger we developed along the way…

I know I’ve talked a lot about the general decline in civility, decency, and interpersonal relationships as of late. It has become a bit of an obsession of mine, if only because of what I’m seeing it do to politics and policy in the city, province, country, and world.

I’m not the only one concerned about how people are harbouring anger, letting it corrode their souls, and then firing it outward, indiscriminately, at everyone and everything they see in fits of directionless, petulant, childish rage.

Outgoing NDP MP Charlie Angus wrote about it for The Tyee last week, pinning much of the blame for the current wave of anger on Pierre Poilievre. Angus has a point; sure, every party can be a bit nasty and throw barbs around, but Poilievre is taking it to a whole new level. Poilievre’s rhetoric and campaign focus is entirely divisive, skipping any substance and replacing it with pure rage. Poilievre blames every problem on the PM or the NDP, poisoning the well of public discourse for his own gain. Unfortunately, he is setting the agenda and has been enthusiastically supported in his rage crusade by much of Canada’s media.

This ugly new culture of rage is infecting policy and creating conditions where the government is unable to function because of mass public anger over things they don’t understand, simply because they’re coming from this government.

Take one of the key policies from the recently-revealed federal budget: the government’s plan to increase the “capital gains inclusion rate”.

Justin Trudeau has started to highlight these changes on social media, albeit about three weeks too late to have any meaningful impact. This is especially frustrating, considering the change was released as part of the budget and the Liberals just let it sit there for two weeks. During those two weeks, they let everyone else take control of the narrative and just twiddled about. In that time, they tweeted about this important change only three times, mentioning it by name just once. In the other two tweets, they opted for the dull phrasing “making the ultra-wealthy pay a bit more to deliver programs for the middle class”.1 UGGHHH. BORING. BE BETTER.

So what’s this change all about?

A “capital gain” is the profit someone makes when they sell an asset (called a capital property) they’ve purchased as an investment. A stock is a capital property. An income property is a capital property. A cottage is a capital property. Cats, apparently, are not capital properties, as one expert told me they are “everywhere” and “who would want one?” and “stop trying to give me your cats.”2 

As it stands, you are only taxed on 50% of your capital gains.

Let’s say you decide to go off and buy a single stock in the “Moderately Excellent, Occasionally Wow Cat Food Company” when it is at $1.00. You hang onto it for a while until, one day, you’re mindlessly scrolling on the internet and come across a post that says the stock price for the MEOW Cat Food Company has shot up to $11.00. You check, see that it has indeed shot up, and immediately sell it to earn a cool $10.00 in profit. When you file your taxes, you’re only taxed on half - $5.00 in this example - of your “capital gain”. You just roll that $5.00 into your total income for the year.

The federal budget adjusts that ever so slightly. Now, if you have over $250,000 in capital gains, you will be taxed for 66.6% of it - an increase from 1/2 to 2/3. This is anticipated to add over $19 billion to the federal government’s coffers over 5 years.

Just to be clear, by the government’s own calculations, around 90% of Canadians will have $0 in capital gains. Another 9.87% will have capital gains under $250,000. Only 0.13% of Canadians - approximately 40,000 people or double the capacity of FirstOntario Centre/Copps Coliseum/That Fence-Ringed Eyesore Downtown - will have capital gains above $250,000. If you were to make $250,000 in capital gains from a sale of your MEOW Cat Food Company stock, you would have needed to buy 25,000 shares in the company. That’s an initial investment of $25,000, which not a lot of people have to just…throw at stocks. Also, few stocks would provide such an incredible return on investment, so the example has limitations. Listen, I’m a social scientist, not an accountant.

Regardless, here’s another way to look at this: the average income of the 99.87% of Canadians who don’t make a quarter of a mil on stocks and income property sales is around $60,000, while the average income of those who do is around $1.4 million. That’s their average income.

The government has baked in a whole bunch of exceptions to protect skittish moderately rich people, like exempting principle residence sales, RRSP and TFSA income, or any pension incomes. They’ve even created a Canadian Entrepreneurs Incentive, which lowers the taxable percent on capital gains for entrepreneurs from 50% to 33.3%.

This is a tax on the obscenely rich, full stop. This will impact 0.13% of the wealthiest Canadians and only 12.6% of Canada’s largest corporations. The overwhelming majority of Canadians will not be personally impacted by this change.3

Despite this, backlash was swift, with business groups and doctor’s lobby bodies attacking the change as, in the words of a spokesperson for the Canadian Medical Association, “late in the game taxation”.4

Here’s the thing: nobody really gets capital gains, but those who do get them do so because they have a lot to lose from these changes. Matt Gurney’s opinion piece for TVO regarding the changes packs a one-two punch by, first, acknowledging that Canadians don’t really understand capital gains and, second, acknowledging that this has the potential to backfire on the Liberals because of who the tax will impact.

Apparently doctors and vets often “incorporate” as a medical practice and, when they opt to retire, often “sell” the practice to a partner or someone else in the field, meaning they earn the income from the sale. This becomes part of their retirement income which, under the new changes, will be taxed.

And all those mid-to-upper middle class families lucky enough to stumble upon a cottage up north for $15,000 back in the late 1970s are now getting to the point where they’re going to sell. Given the astronomically high prices cottage properties are fetching at the moment, it is entirely within the realm of possibility that a Boomer couple looking to sell their cottage to prepare for retirement would also be taxed on that income.

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Side note: I decided to take a look through the MLS.ca listings for cottages to get a feel for the prices of vacation properties these days and stumbled upon this little gem: a slice of Taylor Island in Lake Muskoka between Gravenhurst and Hardy Lake Provincial Park. The listing says it was the former Glen Echo lodge and comes complete with a series of cabins, 800 feet of shoreline, and two docks which would be perfect for “embarking on a development journey to create a private family compound…” That’s the perfect spot for a Big Gay Commune if I ever did see one! Okay, newsletter’s over, fleeing to Lake Muskoka, byeee.

Oh, wait, I don’t have $2.5 million. Never mind. Back to newslettering, I guess.

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The Spec, for its part, covered both angles, running a TorStar article on how to get around these pesky new tax rules and a John Milloy column about how a combination of lobbying from wealthy interests and general ignorance over the tax system has ruined what could have been a winning policy from the Liberals.

So why are so many regular, everyday people - people among the 99.87% of Canadians who this tax change will not impact - so damn mad about it?

Because people are angry at everything, apparently.

Pollara recently released the results of their latest “Rage Index” survey. Around 1,500 Canadians were surveyed at the end of April to get a feel for how angry or happy Canadians are in the present moment. They used a basic scale that asked respondents if they were “very angry”, “annoyed or moderately angry”, “neutral”, “pleased or moderately happy”, or “very happy” with specific policies or governments.

Overall, 58% of Canadians are either “very angry” or “annoyed or moderately angry” in general. Ontario is the angriest place in Confederation, with 62% of Ontarians just wandering around, peeved at everything and nothing. It’s spring, the weather is beautiful, life’s pretty okay, and I hate everything around me just because.

(Pssttt. Hey, my fellow Ontarians. If you’re mad at everything because you think government policy is making life more difficult, then we need to have a chat about why Doug Ford’s Tories are still at 41% support in the polls. It’s kinda like complaining about all holes in your foot as you reload your…Foot Shooter 3000?…I don’t know guns, I’m sorry.)

There were a wide variety of topics addressed in the survey, but a full 71% of respondents said they were either familiar with or, at the very least, had “heard something about” the capital gains tax changes. It was the standout issue. Only 10% of respondents were familiar with another important budget promise - to provide funding for the building or renovation of child care centres - and only 18% were familiar with the proposed expanded school food program. But a whopping 32% were familiar with the capital gains tax changes. Boomers were more familiar with this than every other generation (45%), but 28% of us lowly Millennial worms knew a thing or two about it.

Look, we studied up on things! Can we have a house now? No? Okay, maybe we could have a functioning healthcare system? No to that too? Well…how about one infinitesimal morsel of hope? Wait, where are you going!?

Now here’s the wild thing: Pollara did a little experiment where they asked people about the capital gains tax in two ways. The first way simply asked respondents how they felt about “increasing the capital gains tax”. In response to that, 35% said “very angry” or “annoyed or moderately angry”, with a full 18% in the former category. Only 8% were “very happy”.

Then, they asked the question while also providing more information. Instead of just “how do you feel about increasing the capital gains tax”, they asked how people felt about “increasing the amount corporations pay in capital gains and increasing the amount people pay for capital gains of over $250,000.” They added a dollar amount, pointed out that corporations will be the biggest group impacted by the change, and gave a little context.

Suddenly, the numbers flip. With that question, 34% were “pleased” or “very happy” and only 23% were angy wittle babies.

The age breakdown is wild. The simple question elicited a net negative emotional response from every generation, with Gen Xers particularly pissed about the changes. When some nuance was added to the question, every generation had a net positive response, with us filthy, world-ruining Millennials suddenly moving from a net negative of 17 to a net positive of 16. Turns out, us overeducated little avocado-toast-munchers actually respond well to…you know…real ideas that are expanded upon in a meaningful, non-patronizing way.

The survey continues, listing the emotional responses of people before and after learning specifics about the budget. Before knowing much about it, 53% of respondents were angry about the entire budget, with a full 19% stating they were “very angry”. After learning about the budget, that overall number dropped by 13%. The “very angry” contingent was cut almost in half.

So, as an Ontarian Millennial, let me be the first to ask: what in the hell is going on here, dammit?

Well, there are quite a few things at play here.

Again, we have to look at the piss poor state of the Canadian media.

Type “capital gains tax Canada” into your Google search bar and click “news” as a filter. The top hits are articles with apocalyptic headlines that present the issue with as little context as humanly possible.

“Capital gains changes could have ‘irreversible’ effects, business groups warn” shouts Global News (owned by Chorus Entertainment, whose CEO, Doug Murphy, has a yearly takehome of $3.7 million). “Canada's largest business groups press Liberals to reverse capital gains tax hike” screams True North, a far-right online news publication run by Candice Malcolm, a former Sun News employee who did a stint working for two members of Alberta’s right-wing royalty, Danielle Smith and Jason Kenney. “Canada's capital-gains tax hike faces heat from business groups” bemoans The Financial Post, the business bro friend of the National Post, which is, itself, Canada’s answer to the question “what if a newspaper was possessed by the spirit of a 19 year-old trust-fund white nationalist who bafflingly choked on his ‘Make America Great Again’ hat during an unfortunate and deeply homophobic fraternity hazing ritual?”.

The tone of those headlines can only be described as “Poilieverian Rage”.

IRREVERSIBLE! TAX HIKE! BUSINESS HEAT!!!

TRU*deep breath*DEAUUUUUUUUUUUUUUUUUUUUUUUUUU!!!!!

The TorStar article about selling one’s cottage before the capital gains changes kick in that was posted on The Spec’s website is a great example of contextless reporting.

The article starts by saying that there will be changes to how capital gains are taxed before quickly pivoting to a quote from the president of Re/Max Canada. Then it jumps to a quote from a tax and estate planning lawyer who says she’s had clients “come to her in a panic” about the changes. It then gives the helpful tip of classifying your more expensive property as your “primary residence” (tax avoidance is fun for the whole family!) before providing anecdotal storied about the lawyer’s clients “gifting or selling to their children right now, before [the day the changes some into effect] June 24.”5

A quick skim of the article and you get “tax increase, panicked owners, need to see financial planner, make changes now”. No discussion about this change impacting just 0.13% of Canadians. No discussion about the revenue generated. No discussion about how people who rake in capital gains have been getting off with a lower tax rate for years. Just…panic.

No wonder “Carol”, one of the wise, eloquent sage voices that populate the Spec’s “Join the Conversation” section below the article, gives us the simple wisdom: “How to stop it…vote that ‘pm’ out!”

So wise. So very, very wise. Many thanks, Carol. Be well 🙏.

To be fair, this article is from a freelancer who writes about “consumer issues” and contributes to the “personal finance” column in TorStar papers. But, still, even a baldly clickbaity piece like this should have a smidge of context.

But the regular reporting on the issue isn’t much better. The CTV report on the changes centres on the on “pushback”, dedicating the first five paragraphs of a 22 paragraph article to the negatives. The first paragraph reads:

Ahh, now we’re getting to it.

You could spend a whole bunch of time and explain that these changes will impact the wealthiest of the wealthy. You could focus on the exceptions and the new programs and all that boring crap. OR…you could frame the story through the elegant, yet simple, lens of “F🍁CK TRUDEAU”.

The government hasn’t made a modest change to capital gains taxes. No, Trudeau has ENRAGED small business owners and PUPPY SAVING VETS with his WOKE taxes.

Mmm, yeah baby, gimme them sweet, sweet clicks. Hook that steady drip of Taboola ad revenue right into my veins!

The media isn’t doing a good enough job of conveying complex information about important government policy in an accessible, compelling way. Rather than even try, they simply follow Poilievre’s lead and let rage be the story of the day.

But the Tories aren’t the only ones benefiting. Large business lobbies have swooped in to do their part in taking control of the narrative for their own gain, even if it hurts Canadians in the long run. And, in doing so, they’ve preemptively convinced the increasingly insecure Liberal government to water down some of their own signature policy positions.

Take properly taxing some of Canada’s biggest landlords, for example.

During the 2021 election, the Liberals campaigned on a pledge to tackle greed in the housing sector by actually, finally taxing Real Estate Investment Trusts or REITs. These REITs are companies like InterRent (which owns a bunch of apartments across the city - in Riverdale, on the east mountain, across downtown, and in Dundas), Choice Properties (one of the real estate divisions of Loblaws and owner of many a strip mall in Hamilton), and Chartwell (the retirement home giant which now counts among its board members Mike Harris, the former PC premier of Ontario).

REITs do not pay any corporate income taxes. Since being enabled in law in 1993, REITs have been exempt from such taxes, as their net taxable income is distributed to their shareholders. Just to be absolutely clear about this: this is a business that does not need to pay business taxes at all.

Last year, the Parliamentary Budget Officer (PBO) released a report on what taxing REITs might look like over the next while. This wasn’t even something the Liberals did on their own; the PBO report was in response to a petition from Kitchener–Centre’s Green MP, Mike Morrice. Their report found that, if REITs were subject to the corporate tax rate of 38%, the government would make over $285 million between 2023 and 2027.

So, in anticipation of this year’s budget, the government floated the idea of finally taxing REITs. Before they could even work out what that policy would look like, the REIT lobby raised the spectre of ~unaffordable housing~ and the Liberals pulled back. A three-sentence statement was posted to the Department of Finance website on May 8 saying that “REITs provide a critical channel for new investment in rental units”, so there will be no attempts made to tax them at all.

Let’s be clear: REITs do not provide affordable housing. They provide market-rate housing in a market that is entirely out of alignment. REITs exist to provide a significant profit to shareholders. One of Canada’s largest accounting firms, Grant Thornton, even released a report calling REITs a “force for good” because of their ability to open investment opportunities in “untapped markets” like “healthcare, student accommodation, social housing, care accommodation, and retirement living.”

BLEAK.

It is especially bleak when people everywhere - even right here in Hamilton - are raising alarms about how REITs are taking advantage of people’s need for housing to enrich investors. Hell, there was a delegation to city council yesterday from a resident in a REIT building who is being subjected to above guideline rent increases while the building falls into disrepair.

And, yet, the government is seemingly aware of the hostile information environment and has decided to walk away from one of the few compelling platform points they had in the dumpster fire of an early election they called in 2021.

The problem, it would seem, is that we can’t have any rational conversations about real, meaningful policy ideas because we’re in a rage spiral. And we’ll only emerge from that rage spiral once we’ve drawn blood.

Unless we can, in a few short months, entirely reimagine how we - and by “we”, I mean politically-engaged people AND the media - do politics and pivot from empty slogans to meaningfully explaining policies to people in ways they can understand, then it seems the only way out is through the cleansing fire of complete Liberal electoral annihilation. Which is frustrating, because it implies that the only way our collective mood will shift is if we let the bullies win. And those bullies have a massive incentive to keep bullying.

I’m not a fan of this government, which should be obvious. But I’m even less a fan of bullies and political inaction and directionless, petulant, childish rage.

I guess you could say all this rage is enraging me.

Okay, maybe I need to scrounge up $2.5 mil and head off to the woods…

Dressed down

Hamilton Centre’s Independent MPP Sarah Jama has some really interesting proposals to better support tenants in Ontario.

On May 13, Jama announced she would be tabling three motions in the legislature. One would call for the elimination of Above Guideline Rent Increases, one to give “collective bargaining rights” to tenants, and one to ensure accessibility is always implemented in new builds.

These are all cool proposals. As an Independent member, she can’t direct the government to do anything, but she can certainly get her fellow members on the record about where they stand on beefing up tenant’s rights and maybe shift the conversation in the right direction.

But, once again, Jama has been silenced by the legislature for her decision to wear the keffiyeh, a garment the speaker of the legislature has called an accessory “intended to express a political message or are likely to cause disorder.” This is a nonsense claim for a chamber that’s supposed to be about politics.

The dress code in the legislature has long been a point of contention. In 2003, Peter Kormos, the long-time NDP MPP for Welland, was targeted by a Liberal MPP for what was considered “unparliamentary” dress: a button-down shirt without a tie and with the sleeves rolled up. His look so offended the members present, that they voted to require a suit-and-tie in the legislature in an act of unrestrained class warfare. In protest, the entire NDP caucus later came dressed as Kormos, while the rebel MPP came in a full tuxedo.

“Don’t lecture us about dress codes because we believe that it’s the substance that’s far more significant than the style,” he said of the incident.

Kormos was right: the way one dresses should not be an impediment to hearing what they have to say. The legislature should have at least had the decency to let Jama present her motions (though, as a censured member, she would not even be able to speak to them on the floor).

It is particularly frustrating that Flamborough-Glanbrook MPP Donna Skelly had the audacity to say that she can’t speak to Jama’s ideas because she hasn’t “seen them and because they haven’t been discussed as long as she continues to defy the speaker we can’t debate them in the house.” It is her party that has led the crusade against Jama, content to use procedure and outdated rules to silence her and the people of Hamilton Centre as both an act of punishment for not electing their preferred candidate and a callous attempt to fan the flames of division for their own benefit.

To the Ontario Progressive Conservative Party: Let MPP Jama present her motions and have an honest, open discussion about them. This is a democracy, whether you like it or not. Start acting like it.

Cool facts for cool people

• Hamilton’s three peregrine falcon chicks have names! The adorable little balls of fuzz are a trio of sisters named Blakeley, Westdale, and Stinson, all cared for by mama McKeever. Yesterday, they were named and little bands were put on their cute, deadly claws so conservation groups can monitor them and make sure they’re happy, healthy, and as murderous as peregrinely possible. Good luck to the little cuties! Caw caw!

• X/Twitter has begun sending warnings to users who post the word “cisgender”, which Musk’s platform considers a “hateful slur”. For the millionth time, X/Twitter/CisRichManVanityProject is now little more than a safe space for bigots and is, undoubtedly, a far-right platform. Please be careful while using it.