The title of this article refers to the Liberal government’s 2024 attempt to take more money from successful people and pour it down the seemingly bottomless hole of wasteful spending. The spending habits of our now-disgraced Prime Minister and his formerly loyal cabinet are the initial cause and sustaining element of the historically unprecedented doubling of Canada’s federal debt in just nine years to a figure now over $1.2 trillion.

That sea of red ink and the $125 million per day (!) interest we are paying on it are the ostensible motivation for the Lib cabinet turning over couch cushions looking for one more source of funds. Apparently, they’ve not learned the lesson that neither individuals nor governments can borrow and spend their way out of debt.

At question is the Liberal government’s move to raise the tax rates on capital gains. The first crazy aspect of their plan is that the legislation by which they hoped to access some billions of dollars has never been passed by Parliament. It’s never even been debated in the House, much less voted on. Nevertheless, the Canada Revenue Agency (CRA ) went ahead on its own, in June of last year, implementing the wishes of the Prime Minister and his cabinet without the approval or serious review by the elected MPs who represent the taxpayers of Canada.

The politicians in Ottawa have not given legislative authority (or agency) to the Agency they supposedly control. It’s like a robot run amuck and failing to respond to the commands of its creator. This is a stark reminder of the terrifying growth of the regulatory agencies that supposedly act under the direction and guidance of our elected representatives and our appointed senators. This is rightly being described as “taxation without representation”, something expressly forbidden by our Constitution. The Canadian Taxpayers Federation (CTF) is taking the government to court to contest this unprecedented action by the CRA.

We support this challenge by the CTF and will be following the case closely. Unless the citizens of Canada are willing to challenge the actions of an out-of-control bureaucracy, we will get more actions motivated by a whim, a pet peeve, an ego or a power trip originating in the arrogant, entitled and privileged class of politicians and government employees who seem to inhabit so many government offices.

The second crazy aspect of this unwelcome change in revenue collection is the fact that the capital gains being taxed under this new provision are not the gains that were being taxed four or five years ago before inflation ransacked the personal savings of Canadian citizens. That’s why I ask, “Where are the gains?” Simply put, inflation has raised the cost of everything, including houses, cars, office buildings, farms and businesses as well as all the ordinary necessities of life. If a person sells a second home or a business—with a net capital gain of $250,00 or more (the level at which it becomes subject to capital gains taxes)—in most cases he or she will be reporting (in our current inflated environment), a capital gain that may not exist in the real world . . . or that may represent a value much lower than that resulting from the simple subtraction of the purchase price from the selling price.

We have addressed before the oft-repeated understanding that printing money and borrowing money create a hidden tax . . . because inflation increases the real cost of goods and services that may be purchased. Unless one’s income or revenue stream has increased at the same rate, one will have less purchasing power. When a person sells a secondary home, a business or an investment property and receives a higher price than what he or she paid for it, that difference is counted as a capital gain. However, that individual may not be able to purchase other goods or services at today’s prices equal to the value of the capital gain that must be declared on CRA paperwork. In addition, the $250,000 net capital gain threshold at which these tax burdens come into effect will be exceeded by more people and businesses today, since the selling price of almost everything has gone up, while the $250,000 benchmark has stayed the same.

After paying the capital gains tax on a declared “gain,” the seller of an asset may have less money—in real terms—than he or she had when the asset was purchased. To purchase an asset of similar value at today’s prices, the victim of this increased and unlegislated capital gains tax would have lost the equivalent value of the “capital gain” tax which he/she paid and would have less real purchasing power due to the CRA tax grab.

For a detailed study on the likely impact of these capital gains tax increases on the Canadian economy and employment, read, Do Not Resuscitate: Increasing the Capital Gains Tax Harms Us All by Jack M. Mintz at the C.D. Howe Institute.

Many of our readers—like myself—may never have to worry about these capital gains taxes affecting them personally. It may be easy to say, “Why should I care?” The problem here is less about the dollars and cents and more about expansive government over-reach. First of all, we have a government that feels it can spend money it doesn’t have and pass the bill onto succeeding generations (another class of future taxpayers who have no say on these decisions). Secondly, we have agencies or branches of government that are acting outside of their mandate and implementing policies and regulations that affect us all.

The Christian Heritage Party has a policy of mandating balanced federal budgets. No more deficits. We would pay down the debt, reduce or eliminate the crippling interest payments on that debt and eliminate the pressure for desperate tax-grabs from Canadian citizens.