Market levelling off
Bill Hubbard - 11:04 am - Columnists

Image: CTV

Even though sales have slowed and inventory has risen in the Okanagan Shuswap housing market, prices have continued to rise. This is very typical of any correcting market.

Prices have now levelled off. I doubt we will see any significant rise or fall in prices in 2019. Toronto is in recovery, Montreal is in a relative boom, and although Vancouver is in a significant correction they will likely level off in 2019.

Other areas in the country are going through different stages of correction. Consumers are getting used to the stress test for mortgages and the inching up of interest rates. This will probably bring a fairly balanced flat market to the Okanagan Shuswap in 2019.

At Century 21 we do a complete market assessment each month to be sure that we are giving our customers accurate advice. Give us a call for a statistical evaluation of your home in this volatile market.

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“Caveat emptor” stands for “buyer beware.” What this means is that there is a risk in buying a property that you cannot avoid.

In a recent case a seller signed a property disclosure statement that indicated there were no problems with the septic system. Our realtor still put in the proper clauses to protect the buyer, but the buyer chose not to get the septic system inspected.

When the septic failed the buyer blamed our realtor. This case is a great example of “we can only do so much.” The buyer had to accept caveat emptor. This is also a great example of the importance of using a realtor and the importance of using one who has been well trained in all ways to protect you.

Buying a home can be risky. Buyers and sellers many times do not know what they do not know. Using a realtor has many benefits. One of the benefits that is not so obvious is the protection of a realtor who has been trained well to write proper contracts. At Century 21 we train consistently and multiple times each week.

Choose your realtor carefully. Choose someone you trust. Then follow his or her advice.

Bill Hubbard is a real estate broker and the owner and broker of a four-office real estate firm in the Okanagan-Shuswap. He has been in real estate for 28 years and has been an owner and broker in Vernon for 20 years. At almost 60 years old he is just as passionate about real estate as the day he started.

Canada losing its edge
Contributed - Nov 09 - Columnists

Image: The Canadian Press

By Fred McMahon

Say you’re a store owner and your competitor across the street offers everything at lower prices, with higher quality and a friendlier attitude.

You’re in trouble. If your competitor was on the other side of the city, things might be a bit better. But across the street?

That’s roughly where Canada finds itself in relation to the United States. This year, for the first time since 2008, the U.S. topped the World Competitiveness Forum’s Global Competitiveness Index (GCI).

Canada ranked 12th out of 140. Not bad, but the best is just across the border.

The 2018 competitiveness report is not directly comparable with previous years due to changes in methodology, which increased emphasis on innovation, where the U.S. remains world champion.

However, the CGI recalculated last year’s scores using the new methodology, revealing a troubling trend. Canada’s rank declined from 10th last year while the U.S. would have been first.

Even using last year’s methodology, with little innovation weighting, the U.S. ranked second while Canada was down at 14th. As the report notes: “The U.S. has been on an upward path for some years.”

The report warns that U.S. competitiveness could be damaged by trade tensions and closing borders. But so could Canada’s. The first shots may have been fired by the U.S., but past experience shows a few shots can erupt into a global trade war, harming everyone. Although a North American Free Trade Agreement replacement, the United States-Mexico-Canada Agreement, has been negotiated, Canada has also imposed new tariffs.

On the positive side for the U.S., deregulation has boosted competitiveness. Regulation is a balancing act; the optimal level of regulation is not zero. However, unnecessary complexity, hurdles, delays and uncertainty should be zero. Canada is far from there. Canadian governments have failed to offer any significant deregulatory strategy to keep the country competitive.

Things may get worse. To give two examples, the grave uncertainty over the Trans Mountain pipeline expansion has alarmed domestic and international investors, while Canada’s baffling climate plan, involving regulation and taxation, gets murkier by the day.

Perhaps surprisingly, in the GCI Canada ranks first in macroeconomic stability, based on inflation and the size and structure of national debt. Canada scored a perfect 100 out of 100. The U.S. ranked 34th. That may seem to give Canada a big edge, but the U.S. score is 99.6, a whisker behind Canada. Countries are so tightly bunched at the top that a minuscule difference in score can result in a big difference in rank.

However, Canada is taking a dangerous fiscal path that threatens to send our macroeconomic score spiralling downward. Bank of Canada monetary stewardship remains strong, but government debt could soon enter a red zone. The federal government has allowed spending to climb and seems in no hurry to put its fiscal house in orderAlberta and British Columbia are becoming spendthrifts. Ontario’s new government inherited a fiscal mess and has yet to announce serious plans to control spending.

Canada’s macroeconomic score may already be drifting downward. The CGI uses data from international sources, which are typically a year or two old. Canada’s fiscal recklessness has increased over that period.

The U.S. faces risks, too. After huge tax cuts, the federal deficit has exploded. But past big tax cuts under presidents John F. Kennedy and Ronald Reagan caused economic activity to flourish and tax revenues to recover quickly and grow, restoring fiscal balance.

As Kennedy said in promoting tax cuts: “Our true choice is not between tax reduction on the one hand and the avoidance of large federal deficits on the other. It is increasingly clear that no matter what party is in power … an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget, just as it will never produce enough jobs or enough profits.”

With the U.S. ranking soaring, Canadian competitiveness faces dangers on at least two fronts. Far from launching rational deregulation, Canadian governments are gumming up the works and sowing uncertainty.

Both Canada and the U.S. face fiscal challenges, but Canada lacks the competitiveness edge and economic boost that tax cuts create.

Fred McMahon is an analyst with the Fraser Institute.

Faces of #OKGNtech
Accelerate Okanagan - Oct 29 - Columnists

Photo: Contributed

A strong community can promote new ideas and ensure accountability. It can also act as motivation, support and even provide a little friendly competition. The power of community is undeniable, and the Okanagan tech community is no exception.

Our community is strong and growing with record speed, and maintaining connections through a period of growth like this can be a challenge. Nobody panic. We’ve got a plan.

Introducing “The Faces of #OKGNtech,” a showcase of Okanagan tech entrepreneurs, partners, supporters and cheerleaders designed to fuel more connection, more growth and more excitement. Follow along on the blog and on Instagram at @OKGNtech to learn more about our growing community and what makes them awesome.

Meet Tyler. Tyler Krenz is an accounting manager who handles owner operated advisory services at Grant Thornton. When Tyler isn’t helping companies operate as efficiently as possible, you’ll most likely find him outside on his bike. #streetbike #roadbike #dirtbike

We recently caught up with Tyler to learn more about his role at Grant Thornton and what he loves about the Okanagan.

What’s your favourite part about your role?

“I really like getting to know my clients and hearing their stories. Listening to everything from the seed idea to where the business is now is my favourite thing about my role at Grant Thornton. I find the entrepreneurial journey fascinating, and I like being able to get involved and help them out.

“I think that a lot of accountants think that they have to be this number crunching person, but we see such a vast range in business that there is a lot of value we can add along the way just by identifying problems and coming up with solutions. It’s not always numbers!”

What’s your favourite thing about the Okanagan?

“I love the Okanagan, so even when I was away in Montreal, I always knew I was going to end up here. I really like that Kelowna has a small-town feel to it still but it’s a big enough city that you are able to build a career here.” #itsallherenow

What’s one word you would use to describe yourself and why? 

“Hmm … one word? Colourful. I have quite a diverse background, and it is actually kind of strange that I ended up in accounting. Right out of high school I worked up north in the oilfield. I moved from that to working in construction and operating heavy equipment. Then I kinda got into buying and selling real estate, which led me into renovations and flipping houses. And now I am working at Grant Thornton.” #ALLTHETHINGS

When were you first introduced to the tech industry? 

“I got involved in the tech industry back in 2013. Then I moved away for a little bit, and I lived in Montreal for two years before moving back to Kelowna. What surprised me the most was how much the tech companies I had made connections with had grown during the two years I was away. It’s incredible to see the challenges that they had overcome and how much they’ve grown in just a couple of years. Some of the same companies I was seeing in Accelerate Okanagan’s quarterly reviews were getting headlines in news articles when I was down in Montreal. Crazy.”

Do you have a piece of advice you can share with us? 

“I feel like a lot of people underestimate the value of hard work. There are a lot of people out there that look at people who are successful, and they attribute luck to it, or they think, ‘Oh that just worked out well for them!’ The reality is that the very successful companies are the companies that work really REALLY hard.” #werkwerkwerkwerkwerk

Who inspires you?

“I am inspired by a lot of people. I am definitely very fortunate with all of the people that surround me. There are very few people in my life who would ever bring me down. Everyone is always pulling me up and pushing me to achieve higher and better.”

Do you work with a lot of tech clients? Are they any different than other clients? 

“I have a lot of tech clients. Tech clients are always a very interesting type of client that’s for sure. There is usually not a whole lot of precedent; most are boom and bust. Like, there is this idea and it’s just expenses, expenses, expenses, and then all of a sudden their idea takes off. Where most of the other businesses I see are a lot more balanced and have a much slower and steadier growth. It’s always interesting to work with tech companies!”

Connect with Tyler. Learn more about Grant Thornton. Hungry for more? Meet Stephan.

Have you seen the rest of the OKGNtech faces? Follow us on Instagram.

Grants help new businesses
Amanda Loewen - Oct 12 - Columnists

Image: Contributed

Social entrepreneurship is about using entrepreneurship (customers’ revenue) to help solve community, social or environmental challenges. Just because social entrepreneurs use customers to help fund their models doesn’t mean that grants shouldn’t also help fund solutions.

To help you with your search, here are a few funding options available for both for-profit and non-profit social enterprises. These are small, but every $10,000 helps.

CREDIT UNION SPONSORSHIPS GRANTS, FOUNDATIONS (FOR-PROFIT AND NON-PROFIT)

Credit unions have been social enterprises before we even had a word for social entrepreneurship. They are important actors in the movement in every community across our country. Often credit unions support community activities and events through grants, sponsorships, as well as volunteer support.

Here are a few good examples:

Valley First Charitable Foundation or Sponsorships & Donations
Interior Savings Credit Union Community Foundation
•Prospera Credit Union Community Programs
•Coast Capital focuses their support on youth
•Vancity has a suite of options to support community. Take a look at their Partnership Funding Programs, which support various priorities like environment, social enterprise, and more.

Nearly every community in Canada has one or more credit unions. Take a look here if you don’t know yours.

NATIONAL RESEARCH COUNCIL (FOR-PROFIT SOCIAL ENTERPRISES)

The NRC’s Industrial Research Assistance Program provides financial support to qualified small and medium-sized for profit enterprises in Canada to help them undertake technology innovation. This can be as small as $10,000 and up to several hundred thousand dollars for a multi-year project. You do not have to be a “technology company” to take advantage of their programs. Through their Youth Employment Strategy, IRAP also provides small and medium-sized enterprises with financial assistance to hire young talent.

CANADA JOB GRANT (FOR-PROFIT AND NON-PROFIT)

The Canada Job Grant offers funding toward the cost of training provided by third-party trainers. The Canada Job Grant could provide two-thirds of the cost of training, up to $10,000 with the employer required to cover the remaining third of the costs. Small businesses with less than 50 employees can benefit from flexible arrangements, such as the potential to count wages as part of their employer contribution.

INNOWEAVE

Innoweave was created to provide free webinars, action-oriented workshops, tools, and funding for coaches to help implement Social Innovation approaches for community organizations. The funding from Innoweave can be used to help implement a new approach within your social enterprise with the help of a coach. Organizations have to attend one of their online Social Enterprise workshops that helps to explore and develop your social enterprise idea, and learn about how to achieve social, cultural and/or environmental goals while generating revenue.

PROVINCIAL TRUSTS

Provincial Trusts provide funding to support social, economic and environmental development projects that will have long-term benefits to a specific region. They work to bring people together, provide resources, and lead initiatives that will strengthen the community in which they operate.

Here’s a small list of some of the trusts available throughout British Columbia:

Southern Interior Development Initiative Trust
Columbia Basin Trust
Northern Development Initiatives Trust
Islands Trust

COMMUNITY FOUNDATIONS OF CANADA (REGISTERED CHARITIES)

Community foundations have a deep knowledge of local needs and opportunities and act as champions for issues that matter. They are dedicated to improving communities by using investment income and donations to create grants available to registered charities.

Here are a few examples:

The Central Okanagan Foundation Community Endowment Fund
Community Foundation of the North Okanagan
Community Foundation of the South Okanagan
BC Interior Community Foundation

For a full list of all 191 community foundations in Canada, or for a list in your region, take a look here.

Must disclose pot grows
Bill Hubbard - Oct 09 - Columnists

Photo: Contributed

Growing recreational marijuana in your home will be legal on Oct. 17, and you will be legally allowed to grow four plants. You would think that having to disclose this to a prospective buyer would go away after it became legal.

Not so fast.

The property disclosure statement, one of the standard forms realtors use in any residential transaction, asks: Are you aware if the premises have been used for a marijuana grow operation or to manufacture illegal drugs? That question will remain.

It does not say “in the last five or 10 years.” It means forever. Illegal activity is only part of the concern. The biggest concern is the mould it creates. This will still be a problem regardless if it is legal or illegal.

A well-trained Century 21 realtor can help you with this. Give us a call.

Bill Hubbard is a real estate broker and the owner and broker of a four-office real estate firm in the Okanagan-Shuswap. He has been in real estate for 28 years and has been an owner and broker in Vernon for 20 years. At almost 60 years old he is just as passionate about real estate as the day he started.

Market is just fine
Bill Hubbard - Oct 05 - Columnists

Image: The Canadian Press

It’s a good real estate market.

Home prices are up 9.5 per cent in all three zones in the Okanagan-Shuswap compared to last year’s to-date statistics.

Inventory is below the 10-year average, and absorption and sales are above the 10-year average.

It’s a market where if your house is valued at less than $700,000 it will be worth more at the end of this year than it is today.

It’s a market where there are still plenty of multiple offers from buyers going after the same house, but you have a better chance of avoiding them than you did in 2017 and 2016.

It is a market where, as a buyer, when you find a house you like there isn’t a 90% chance that it will be gone by the time you write an offer. There is only a 50% chance of that.

It is a market where there is a little bit more to look at and you can negotiate a little bit more. What kind of market is this? It’s a normal market.

 

Bill Hubbard is a real estate broker and the owner and broker of a four-office real estate firm in the Okanagan-Shuswap. He has been in real estate for 28 years and has been an owner and broker in Vernon for 20 years. At almost 60 years old he is just as passionate about real estate as the day he started.

Where is turkey egg market?
Contributed - Oct 05 - Columnists

Photo: Contributed

A perennial favourite for countless Canadians during Thanksgiving is the iconic turkey dinner. And while turkeys are well known for their meat, it is virtually unheard of to eat their eggs.

Why is that?

Nathan Pelletier is an ecological economist at UBC’s Okanagan campus and the first-ever Egg Farmers of Canada Industrial Research Chair in Sustainability, awarded by the Natural Sciences and Engineering Research Council of Canada. He sat down with UBC Okanagan Media Relations to discuss the reason turkey eggs aren’t more common and the sustainability of eggs more generally.

Why don’t we eat turkey eggs?

That’s a really interesting question and one that I hadn’t really thought of before. The reason may be primarily about profitability. Turkey’s take up more space and don’t lay eggs as often. They also have to be raised for quite a bit longer before they begin to lay. This means that housing and feed-related expenses would be considerably higher for turkey eggs compared to eggs from chickens. Since providing feed is also responsible for the largest share of the resource use and emissions associated with egg production, turkey eggs would have commensurately higher impacts, which wouldn’t be great from a sustainability perspective.

Is there any reason why we can’t eat turkey eggs?

No. They are completely edible. They have a similar creamy consistency to duck eggs and a speckled complexion like quail eggs. I actually think they would make for a very interesting and maybe even beautiful accompaniment to a turkey dinner. I suppose the most difficult part would be finding somewhere to buy them.

Why then are chicken eggs so much more common?

Again, it likely comes back to the cost of production. Farmers have been improving management strategies for producing chicken eggs in dedicated commercial facilities for almost one hundred years, and there have been genetics programs in place dedicated to optimizing layer hen genetics for productivity since shortly after WWII. Canadians now consume about 70 million chicken eggs annually.

What is the ecological impact of producing and consuming all those eggs?

Chickens actually convert feed to food very efficiently. It takes about 2 kg of feed to produce 1 kg of eggs, and the average laying hen now produces 300 eggs per year. For these reasons, chickens are an affordable and low-impact source of high-quality animal protein. Interestingly, despite Canadian industry producing roughly 50 per cent more eggs now than it did 50 years ago, my research has shown that, due to improvements in efficiency over time, the resource and environmental footprint of the industry as a whole has actually decreased substantially since the early 1960s.

With eggs being such an important food staple for so many Canadians, how is your work helping make egg farming more sustainable?

While the industry has come a long way, the question and challenge that now presents itself is how to ensure comparable success looking forward. My research focuses on identifying and evaluating the effectiveness of different management strategies and sustainable intensification technologies that can be applied in the egg industry.

Why is sustainability an important issue for Canadian eggs?

Sustainability is an important issue for food systems as a whole. The Canadian egg industry adds an estimated $1.37 billion to the economy annually and plays an important role in the diets of most Canadians. As with everything we consume—food or otherwise—searching for more sustainable ways to meet our basic needs and support our lifestyle aspirations is essential to ensuring that we can maintain the conditions necessary to our well-being over time.

Social enterprises rewarded
Amanda Loewen - Oct 05 - Columnists

Photo: Contributed
L to R: Tori Hanson (Elevation Outdoors), Sue Manzuik (Interior Savings), Reanne Holden-Amadio (United Way), Jessica Bodrug (Elevation Outdoors) and Mike Greer (Elevation Outdoors).

United Way Central and South Okanagan/Similkameen (CSO), in partnership with Interior Savings Credit Union, on Wednesday announced the recipients of the inaugural investments from the Social Enterprise Accelerator Fund. Penticton’s Okanagan School of the Arts and Kelowna’s Elevation Outdoors secured funding designed to help them build long-term sustainable revenue for their social enterprise programs.

Both organizations will receive 15 months of mentorship through Purppl’s Social Enterprise Acceleration program.

Okanagan School of the Arts’ Shatford Centre is a beautiful heritage building in the heart of Penticton. Currently, the centre provides event and program space but sees huge potential to create an innovative hub for creative community events and connections for social services, non-profit, business and arts organizations.

“The mentorship provided will help the Shatford Centre realize its full potential,” president Pat Field says. “It will enable us to evolve our existing business model and take it to new heights, generating income while building a regionally significant creativity and innovation centre for the economic and social well-being of our community.”

Elevation Outdoors’ social enterprise project has two components: the Intro to Adventure Summer Camp, and the Elevation Bus and Bike Rental programs. The Intro to Adventure Summer Camp is a fee-for-service program that assists young people to gain access to outdoor recreation opportunities, and the Rental Program utilizes existing assets for rental to other local organizations and companies.

“This investment will enable Elevation Outdoors to leverage the skills and equipment we already hold to increase our reach and become a more sustainable organization,” Elevation Outdoors founder Tori Hanson says. “Our summer camps aim to get more young people into the outdoors, contributing to their mental and physical well-being, while generating income to subsidize our programs for at-risk youth. The rental of our bike fleet and bus will help offset yearly operating costs.”

Purppl’s program teams social enterprises with a pair of experienced “entrepreneurs in residence” to help them refine and scale their business model. Two such entrepreneurs in residence are Alyssa Farr and Fraser Campbell. Farr co-founded a social enterprise commercial, industrial and residential repair contracting company. She also helped to initiate three social enterprises with Metro Community. Campbell is a serial entrepreneur who grew fencing and pallet companies across Canada, among other startups. He is also the Kelowna Food Bank director and contributed significantly to its new building project. Entrepreneurs in residence bring a balance of experience and coaching while also helping to hold each social enterprise accountable for moving forward.

“For United Way and Interior Savings Credit Union this collaborative fund is about supporting the capacity and long-term sustainability of charities in our region,” United Way CSO executive director Helen Jackman says. “The fund is groundbreaking in our region and something we hope to repeat in future years as we learn how this kind of smart investment can spark new social businesses.”

To apply, charities needed a well-formed social enterprise idea—one that, with the right support, could grow to deliver both economic and social outcomes. Applicant charities submitted their proposals at the end of May and were invited to present their social enterprise at a Dragon’s Den style pitch night to an independent selection panel that scrutinized potential social impact, sustainability, ability to scale and leadership.

More information on the Social Enterprise Accelerator Fund is available here.

Act before recession hits
Contributed - Sep 26 - Columnists

Photo: The Canadian Press

With the resumption of Parliament, Canada’s policymakers face turbulence. The United States and China are waging an economic cold war armed with tariffs.

And Ottawa continues negotiating with the administration of U.S. President Donald Trump over the North American Free Trade Agreement (NAFTA), with an American deadline looming on Sept. 30.

Alongside all this, there’s mounting evidence that Canada’s economy and federal fiscal situation are declining and that we may be on the verge of a recession. Indeed, the economic challenges facing the Trudeau government are intensifying.

For example, the unemployment rate in August rose to six per cent with Ontario leading the way, losing about 80,000 jobs. Rising interest rates, combined with economic uncertainty on the trade front, have eliminated the economic momentum that helped create a stronger employment situation. In 2017, employment grew by nearly two per cent. Based on results to date, in 2018 growth fell below one per cent, with July and August showing employment declines.

And slowing employment growth is accompanied by Canada’s perennial capital investment lag. As noted in a recent Fraser Institute study, the growth of overall capital investment in Canada slowed substantially from 2005 to 2017 and was lower than in virtually any period since 1970.

More ominously, it appears the shares of total investment in machinery and equipment—the core of investments needed to boost economic productivity—have been declining, while the share of total investment accounted for by housing is up.

The delay of the Trans Mountain pipeline project is a serious blow to boosting productivity in our natural resource and transportation sectors, given that so much of our transportation network is geared towards the movement of natural resources, including oil and gas.

In fact, Canada’s capital investment performance has looked better than it actually is because of the hot housing sector. Given that so much of Canada’s recent economic growth has been tied to housing wealth, indebted consumers will be stressed if employment losses mount and interest rates continue to rise.

The slowdown in the housing market in response to government policy initiatives and the gradual rise in interest rates makes the deterioration in the business investment climate even more serious.

Uncertainty over NAFTA and a more tax competitive U.S. business sector don’t bode well for a pickup in Canadian business investment, especially in the absence of any aggressive measures on the corporate tax front.

And if all this is not enough to keep Finance Minister Bill Morneau up at night, a slowing economy means that the federal deficit projections in the 2018 budget may be underestimated if government revenues weaken. The 2018 budget forecasts continuous deficits that would see net federal government debt rise from $757.8 billion in 2018-19 to $831.5 billion by 2022-23—an increase of nearly 10 per cent.

Moreover, the optimistic forecasts of gross domestic product growth in the budget made for a declining federal debt-to-GDP ratio, but that’s certainly not in the cards if the economy slides into recession. If debts and deficits are higher than projected, it will be yet another blow to business investment confidence in Canada.

The Canadian economic train may be close to going off the rails. To improve the country’s business investment climate, the government should have three main priorities:

• resolve the trade situation with the U.S. via a new agreement or other significant initiatives designed to boost and diversify our trade;

• rein in the federal deficit now, in advance of any further economic slowdown, which would increase our already large federal deficits and debt;

• reform corporate taxes to make our business sector more competitive.

The time to act is now.

Livio Di Matteo is a senior fellow at the Fraser Institute and economics professor at Lakehead University.

Estate tax not needed
Contributed - Sep 24 - Columnists

Image: Thinkstock

A long-dead and largely unlamented tax has recently been rediscovered and embraced by certain people: the death tax, or estate tax.

But inheritance taxes were abolished in Canada in 1971 by the Liberal government when a capital gains tax was introduced.

In Canada, estates are already taxed on the difference between the market value of the securities or other assets at the time of death and what they cost.

Fans of restoring the death tax ignore the existence of these capital gains taxes, and also the taxes that were already paid on the income that went to invest in or grow the assets (say a business or farm) initially.

There’s only one real justification for taxes: to finance government. All functions of government require funding of some sort.

So how do you provide that funding in a way that’s perceived to be fair and efficient, and not oppressive?

The current approach is to use a wide variety of taxes, some of which may not be fair, are likely oppressive, and are certainly inefficient. Often they’re intended to attain social goals, not merely revenue ones.

Sales taxes, value-added taxes and the increasingly notorious tax on carbon dioxide—the carbon tax—are the most efficient taxes. But they’re also considered the most regressive, as they are disproportionately punitive on lower-income households.

Excise or sin taxes target unessential goods such as tobacco, alcohol, cannabis now and sometimes sugar. They try to modify behaviour so consumers become healthier. However, evidence of the effectiveness of these taxes is meagre. Fuel excise taxes, for example, punish drivers to supposedly fund the roads they drive on.

Payroll taxes are meant to fund pension and unemployment insurance programs. But they have the unintended effect of discouraging hiring and the pursuit of employment since they increase the employment cost burden.

Property taxes and property transfer fees are supposed to fund schools and infrastructure. In reality, they go into a general revenue pot. In practice, property tax revenue is adjusted to meet budget needs, not the other way around.

A land tax, which some economists favour over property taxes, would likely reduce property speculation. But it wouldn’t necessarily reduce the artificial scarcity from restrictive zoning and permitting that reduces supply and raises prices.

Wealth taxes don’t exist in Canada and are rare elsewhere in the world.

Tariffs and duties, once the main source of income for national governments, are now a very small part of the pie. It’s a similar story for permit and registration fees, fines and other government charges.

That leaves income taxes, corporate and individual, as the main and least efficient sources of government revenue.

Individual income tax is much higher than corporate tax. According to the Canadian Taxpayers Federation, in 2014 the 8.4 per cent of taxpayers who earned $100,000 or more paid 51.8 per cent of all income tax. And 33 per cent of Canadians, generally earning well under $50,000, paid nothing.

There are some costs that lower-income households bear that are brought about by government policy via regulation. These can be alleviated by such measures as the Canada Child Benefit and other transfers, a negative income tax, or a credit to employers and employees to offset the first expensive chunk of payroll taxes.

Estate taxes discourage investment and punish people who accumulate capital that helps to grow the economy and generate jobs.

The quest to equalize outcomes is ultimately mean-spirited, punishing those who succeed. And it further exacerbates the productivity and growth problems nagging this country.

Ian Madsen is a senior policy analyst at the Frontier Centre for Public Policy.

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