Canada has truly lost the values that made it a great country and our economic future is at real risk
Article content
Canada’s core values have shifted so meaningfully that I am afraid they are destroying the economic future of this country for our children and grandchildren.
I find that explaining our financial picture can most simply be outlined through a family.
If you are the parent of an adult, let’s pretend that “child” is in debt and doesn’t work very hard, but still likes to maintain an expensive lifestyle. He wants to dress well, get teeth whitening, go on nice vacations and generally live well. But money is tight, so there could be a real problem unless he gets a new credit card approved. The solution is to ask the parents to do a little bit more to help him out.
Advertisement 2
Article content
In this little production, the adult child is the Canadian economy and the parents are the taxpayers in the middle-to-higher income bracket.
In discussions with many people since the budget release in April, there is definitely some frustration about the higher capital gains inclusion rates, but the biggest frustration is that we continue to spend more when there is already a massive debt. Canada just confirmed a $50.9-billion deficit for 2023-2024. Why are we putting in a new budget plan for the next few years that has roughly $40 billion in expected deficits?
Going back to the family analogy, it is pretty clear the adult child can’t afford to live the life they want to live. They need to cut back on spending and find a way to earn more money — maybe even by working much harder. He suggests he just needs financial support now, but his parents know there will be a lot of support needed for the next couple of years at least.
The difference, though, is that if the parents grudgingly help out their child, it is their choice to do so. This isn’t the situation with the taxpayer, who will be dragged down with the financially weak child, whether they say yes or no.
Top Stories
Article content
Advertisement 3
Article content
Where did we go wrong? Canada’s values have shifted in so many ways. We don’t reward a strong work ethic or success. Instead, we enable a poor work ethic and mediocrity. We give away things that we can’t afford because it buys votes. We punish risk-taking and reward safety. We have lost our successful strategic immigration strategy.
Here’s an example. Using the Child and Family Benefits Calculator on the Government of Canada website, I put in a fictional family in Ontario in an urban setting. They were not Indigenous, but have four children, aged two to eight, and a household income of $41,000. Admittedly, that’s a very tight financial situation based on their reported income.
The good news is that the calculator says they will receive $40,363 from the government this year. They will receive $34,388 in federal and provincial child benefits, which are all tax free and easily the equivalent of $40,000 to $60,000 before tax. The rest comes from the GST/HST credit, Canada Carbon Rebate, Ontario Trillium Benefit, Ontario energy and property tax credit, Ontario sales tax credit and the Advanced Canada Workers Benefit.
Advertisement 4
Article content
How in the world can we afford to provide $40,363 in largely tax-free benefits to this family? If you were a young, struggling family in Canada in 1920, 1940, 1960 or 1980, did you receive the equivalent of $40,363 a year? Not a chance.
Another thing is that working for the government is better than running a business now. Last month, the government voted on Bill C-58, which essentially means there will be a ban on the use of replacement workers if there’s a strike in a federally regulated workplace. The bill also sets out penalties for breaking the rules: $100,000 per day for employers.
Let’s get this straight: If I am a private employer in a federally regulated industry and a group of employees decides to strike, this legislation says it is illegal for me to hire someone to replace that worker. And it was voted in unanimously by our MPs in Ottawa.
Whether this is good legislation or bad, it is another step further away from enticing anyone to run a business in a country that makes the risks ever higher, the rewards ever lower and the alternatives increasingly risk free.
Now, imagine you are a bright, young Canadian and given two options a few years into your career. One option is to leave your job and start a new company. The other is to accept a mid-level job offer from the Ministry of Anything in the federal or provincial government.
Advertisement 5
Article content
If you start a new company, you take on all the risk. If you are unsuccessful, it will be a huge financial loss for you. If you manage to succeed, just think of the hurdles you had to overcome to make it happen. From the ongoing regulation and red tape in almost every industry, to labour laws that are significantly in favour of employees, to the wild cycles of the economy. But if you are successful, keep in mind that more of that success will still end up going to the government in the form of higher taxes.
If you take the government job, you will have incredible job protection, an old-fashioned defined-benefit pension, and the potential to qualify for your full pension in your late 50s, if not earlier. Yes, the job may take away some of your initiative and excitement. Yes, you may not put in late nights thinking about ways you can make small improvements to benefit your department. Yes, you may never be considered wealthy from your work. But you will have locked in a degree of financial peace of mind that most Canadians can only wish for.
The decision is pretty stacked in favour of the government job for most young Canadians who have grown up during the past 20 years.
Advertisement 6
Article content
What does this say about the future of the Canadian economy and prosperity? What does it say about our values?
It says we have turned our backs on our strengths: our access to significant supplies of oil and gas and some key metals and minerals; our ability to attract educated young people to come here to work; and our reputation as a country with solid laws, freedoms and order, and one with access to reasonably good health care and education.
How many of these strengths are we really maximizing today?
We have treated our explorers, refiners and transporters of raw materials with contempt. We constantly reprimand them for doing their job by telling them they need to hit lower emissions targets and do their work in less efficient ways.
Our once powerful immigration policies have simply become a door that has been shoved open wider with a much duller approach to targeted immigration.
Our laws are being stretched in several ways. In general, we are struggling to enforce our laws, either because we simply do not think there should be any consequences for many crimes or because we have such an inefficient judicial system that rulings can’t be made in time.
Advertisement 7
Article content
As for health care, we are simply slipping in terms of our ability to meet the core needs of Canadians. We see this anecdotally in our own care, and that of friends and family, and we see it in the longer wait times for paramedics, emergency room attention and many surgeries. There are still those who get excellent health care for serious issues, but the day-to-day care is falling behind.
Recommended from Editorial
And on education, let’s just say that politics and diversity, equity and inclusion initiatives are getting in the way of our children receiving the best possible core education.
Where I am going with all this is that Canada has truly lost the values that made it a great country. Our economic future is at real risk as a result. I hope it isn’t too late for change.
Ted Rechtshaffen, MBA, CFP, CIM, is president, portfolio manager and financial planner at TriDelta Private Wealth, a boutique wealth management firm focusing on investment counselling and high-net-worth financial planning. You can contact him through www.tridelta.ca.
Article content
Ted Rechtshaffen: Canada's shifting values are leading us to a scary economic future - Financial Post
Read More
Comments