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National revenue minister asks CRA to investigate B.C. real estate speculators

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Canadian Realestate Magazine | 13 Sep 2016, 11:14 AM Agree 0
National Revenue Minister Diane Lebouthillier has asked the Canada Revenue Agency to look into the actions of real estate speculators in B.C. following a newspaper investigation
  • MFenn | 13 Sep 2016, 01:25 PM Agree 0
    This article raises a number of important issues and distinctions in terminology.

    Just remember that the way the word 'speculator' has historically been used is not dissimilar to the way the word 'investor' is used today.

    In the 19th century, when money was relatively stable, the word 'speculator' tended to be used to refer to trade in commodities which involved a comparatively high risk factor.

    Following the era of inflation, the word 'investor' is often used interchangeably with 'speculator'. The word 'speculator' is indeed used positively when it does not involve activity that is excessively risky. 'The U.S. Commodity Futures Trading Commission defines a speculator as "a trader who does not hedge, but who trades with the objective of achieving profits through the successful anticipation of price movements." The agency emphasizes that speculators serve important market functions...' (Source: Wikipedia).

    It would beggar belief that a minister of the Federal government would not know these distinctions: or maybe the minister does know, but has been poorly represented in reporting.

    In the context of this article against the background of real estate investing, another quite distinct element seems to have been introduced: relating to property taxes for real estate investors.

    Again, the big distinction needs to be made between tax avoidance, which refers to the proper and honourable arrangement of one's business affairs in order not to have to pay unnecessary tax, and tax evasion, refers to the failure to meet one's tax liabilities.

    Again, it would beggar belief that a minister of the Federal government would not know the distinction between excessive speculation (sometimes used derogatively), wise speculation/investment, tax avoidance and tax evasion: these are all different concepts, some of them vastly so. Or maybe the minister does indeed fully understand the nuances of these terms, but has been poorly represented in reporting.

    Part of the CRA's role is, of course, to investigate tax evasion. One can maybe understand unscrupulous, hypothetical populist politicians who might choose to rage against investors and argue instead for a command economy historically associated with either communists or fascist-style nationalists. But this would have absolutely nothing to do with the remit of the CRA.
  • MFenn | 13 Sep 2016, 05:47 PM Agree 0
    (Word order adjustment, above)

    ...another quite distinct element seems to have been introduced: relating to taxes for real estate property investors.
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