CANADA MIDDLE CLASS – REVIEW AND

ANALYSIS BY: PAUL YOUNG, CPA, CGA

OCTOBER 31, 2016

DISCLAIMER

• This presentation is on view of the middle class and the economy and should not be deemed the only source

PAUL YOUNG - PRESENTER

Bio

• CPA/CGA

• 25 years of experience in Academia, Industry and Financial solutions

• Youtube Channel - https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

AGENDA

• What is the middle class

• Impact of the Middle Class Tax cut

• Ranking

• Quotes

• Household income

• CPC Tax Cuts

• Top 1%

• Middle Class comments

• Standard of Living

• Other sources

WHO IS THE MIDDLE CLASS

• Individuals who fall between the working class and the upper class within a societal hierarchy. In Western cultures, persons in the middle class tend to have a higher proportion of college degrees than those in the working class, have more income available for consumption and may own property. Those in the middle class often are employed as professionals, managers and civil servants.

CANADA MIDDLE CLASS

• 1980

• 2013

INCOME GROWTH

LIBERAL TAX CUT

https://www.pressprogress.ca/3_reasons_why_the_middle_class_tax_cut_does_not_truly_benefit_the_middle_class

Facts:• Two-thirds of Canadians

who earn less than $45,000 see no benefit

• Canada's wealthiest 10% will get half of all the benefits from the "middle class tax cut“

• The new tax changes will not raise any money

Impact to the economy• Provincial policies like hydro will eat into any savings• Hikes to CPP will eat into tax cut savings• Elimination of boutique tax credits for fitness,

textbooks, etc. • Reducing the TFSA from 10,000 to 5,500 • Tax cut is not revenue neutral -

http://business.financialpost.com/personal-finance/taxes/finance-minister-bill-morneau-says-liberals-moving-ahead-with-middle-class-tax-cut-higher-rate-for-wealthy

MIDDLE CLASS QUOTES

HOUSEHOLD SPENDING

CPC/TAX CUTSLow Income Canadians

COMMENTS/MIDDLE CLASS

• NDP and Liberal Comments - http://www.torontosun.com/2015/08/15/trudeau-and-mulcair-selling-a-fantasy-to-the-middle-class or http://www.cbc.ca/news/politics/trudeau-speech-chamber-commerce-1.3513939 • I hear the same comments that Harper has killed the middle class when it is has been bad provincial policies led by various provincial government that felt social policy at all costs is the solution to run their various

budgets. Here are facts/videos on the middle class - https://www.youtube.com/watch?v=xqLDHQ-iJU8 (is this a lie? or https://www.youtube.com/watch?v=yOl37VcG89c (is this a lie? - http://globalnews.ca/.../tax-cuts-since-2005-net.../ (is this a lie?) or http://www.slideshare.net/paulyoungcga/taxation-policies (are my slides 8-11 wrong).

• I hear that the above information is wrong, but no one refutes that my information is wrong via providing facts that support socialism is working in Canada. • BTW: Hiking the corporation tax to 18-22% range will add 2-8% more to cost of your iPhone, iPad, Clothes, transit passes, food, beer, wine, etc.

http://www.slideshare.net/paulyoungcga/corporation-taxation-canada-44675640. BTW – Where does Mulcair stand on Corporate tax? Oops, Mulcair cannot remember the rate: http://www.canadianmanufacturing.com/financing/ndp-leader-mulcairs-corporate-tax-policy-needs-clarity-150026/. This about month old and we still have no response on rates, why?

• NDP/Economy - http://news.nationalpost.com/news/canada/canadian-politics/b-c-economy-stagnates-under-ndp-rule-report • Justin Trudeau cannot even tell you who makes up the middle class - https://www.youtube.com/watch?v=5WHIS3w4wn4 • How about childcare: http://www.iedm.org/fr/2821-quebecs-failed-child-care-model • I thought Harper is bad news, right? If so, how come Canada is one of the most admired countries in the world: http://www.ctvnews.ca/canada/canada-ranked-as-most-admired-country-in-the-world-report-1.2470040 • Canada also has done well compared to its peers across the world - http://www.bmonesbittburns.com/economics/forecast/int/intmodel.pdf • Canada is seeing shift up the ladder in terms of income/wealth, but no comment, why?

http://www.theglobeandmail.com/report-on-business/top-business-stories/canadians-scale-the-income-ladder-with-the-best-of-them/article25533315/?click=sf_globefb • Remind me again why we should change to either Mulcair or Trudeau government as the facts do not align with their policies!

http://www.torontosun.com/2015/08/15/trudeau-and-mulcair-selling-a-fantasy-to-the-middle-class • FYI – Canada is still one of the best countries in the world - http://news.nationalpost.com/news/canada/canada-named-the-country-with-the-best-reputation-by-global-survey-again or

https://ca.news.yahoo.com/blogs/dailybrew/canada-tops-the-world-as-most-reputable-country-021908756.html • FYI – Taxing the richest - http://www.cbc.ca/news/canada/new-brunswick/higher-taxes-on-rich-may-miss-revenue-targets-experts-say-1.3031842 or https://www.youtube.com/watch?v=pICUvNi95AY • FYI – Liberal Platform - http://news.nationalpost.com/full-comment/kelly-mcparland-liberal-release-budget-plan-now-they-need-to-hope-no-one-reads-it • FYI – CPC/Fiscal Management - https://www.youtube.com/watch?v=1lyOaeBYV6w • FYI – Harper has no control over areas like hydro rates - http://laws-lois.justice.gc.ca/eng/const/page-4.html

TOP 1% TAX BRACKET

ISSUES FACING CANADIANS

• Carbon pricing (Federally and Provincially)

• ORPP (Ontario Register Pension Plan)

• Hydro Rates (Provincial Jurisdiction)

• CPP Hikes

• HST/PST increases

• Slow wage growth

STANDARD OF LIVING

• http://uk.businessinsider.com/19-countries-with-the-highest-standard-of-life-according-to-the-social-progress-report-2016-6

SCANDINAVIA VS- CANADA • People constantly are saying well look at Norway, Sweden, Denmark and Finland and they have great social programs and strong economies. So, why cannot Canada have the same

that is higher taxes and more commitment to Social Programs? • Canada is joined at the hip with the USA as such has to be competitive with United States on costs. Payroll taxes are costs for business as such they have kept in check . Canada’s

economy is driven by commodities, like oil, natural gas, precious metals, agriculture, etc. as such has to depend on exports. Exports account for 1/3 of GDP and are growing at 4% clip each year

• Scandinavia countries are very expensive for business: http://www.smh.com.au/business/the-economy/australia-the-most-expensive-country-in-the-g20-20140512-3846v.html. Some Swedish companies are re-looking at their investment due to the high cost: http://www.bcg.com/media/pressreleasedetails.aspx?id=tcm:12-141488

• Canada competitiveness as slipped, but some of that slipped has to do with bad polices at the provincial level: http://www.conferenceboard.ca/press/newsrelease/13-09-04/canada_ranks_14th_in_global_competitiveness_for_the_second_consecutive_year.aspx. Ontario has drove business out with more regulations as well as high power costs!

• Canada commitment to social programs: http://www.oecd-ilibrary.org/social-issues-migration-health/government-social-spending_20743904-table1. You will notice that Harper’s government continue put money into social programs.

• Harper has increase the transfers for education as such money has flown to post-secondary education by the provinces: http://www.stlawrencecollege.ca/news/2014/oecd-report/• Neither LPC and/or Conservatives have had much success on R&D and that has to change. http://academica.ca/top-ten/lack-rd-spending-hurts-canada-wef-rankings. Justin

Trudeau talks about increase funding for education via his website, but says little on how that funding would be applied, i.e. more spots or R&D grants or other programs. SDTC has help with technology, but more is required - http://www.sdtc.ca/uploads/2014/SDTC_2014%20Corporate_E_Executive_Summary_V1_%28V6b%29_SSL_291013.pdf. Harper has done well on the tax file: http://www.kpmg.com/ca/en/issuesandinsights/articlespublications/press-releases/pages/canada-remains-most-competitive-business-tax-environment.aspx. It is unclear why the LPC will do on business taxes!

• Education - http://www.independent.co.uk/news/world/europe/finland-schools-subjects-are-out-and-topics-are-in-as-country-reforms-its-education-system-10123911.html• VAT - http://www.skatteetaten.no/en/Bedrift-og-organisasjon/Merverdiavgift/Guide-to-Value-Added-Tax-in-Norway/?chapter=3730#kapitteltekst• http://sustainability.thomsonreuters.com/2014/05/11/end-oil-boom-threatens-norways-welfare-model/. Norway has AG sector, but little else as compare to Canada that has MFG,

food processing, lumber, fishing, etc. • Norway debt to GDP http://www.tradingeconomics.com/norway/government-debt-to-gdp is at 29• Argument against Norway - http://www.sovereignman.com/expat/why-norway-is-a-bs-argument-for-higher-taxes-8235/

OTHER SOURCES:

• Top Earner - http://www.slideshare.net/paulyoungcga/wealthiest-income-earners-in-canada-taxation-and-income-redistributiion

• Guarantee Income - http://www.slideshare.net/paulyoungcga/government-policy-guarantee-income-canada

• Income inequality - http://www.slideshare.net/paulyoungcga/government-policy-income-inequality-canada

• Scandinavia vs- Canada - http://www.slideshare.net/paulyoungcga/scandinavia-vs-canada-analysis-of-social-and-economic-policies