Finance Minister Chrystia Freeland announced on Tuesday that the Liberal government will present its proposal to increase the inclusion rate on capital gains to the House of Commons before the summer break. This move follows the introduction of the capital gains tax changes in Freeland's April budget, though the new inclusion rate was not included in last month's budget legislation.
"In the coming weeks, and certainly before the House rises, we will begin the legislative process to implement our increase in the inclusion rate," Freeland stated during a news conference.
Currently, only half of the profits made from selling assets, such as stocks or secondary real estate, are taxed. The proposed change would make two-thirds of these profits taxable. This new rate will apply to all capital gains realized by corporations, while individuals will only face the higher rate on gains over $250,000. The government says the changes will take effect on June 25, regardless of whether the bill has passed by then.
The proposal has faced significant opposition from business and physician groups, who argue that the increase in the inclusion rate is detrimental. Despite this, the Liberals argue the change is necessary to fund crucial services like housing and healthcare, estimating it will generate $19.4 billion over the next five years.
Freeland also used the opportunity to criticize Conservative Leader Pierre Poilievre for not taking a clear stance on the proposed tax changes. She urged Canadians to demand a definitive answer from the Conservatives on the matter of tax fairness.
In response, Conservative spokesperson Sebastian Skamski noted that the legislation has not been presented yet, blaming what he described as incompetence from Prime Minister Justin Trudeau's administration. Although the Conservatives opposed the overall budget last month, they have yet to declare their position on the specific capital gains bill.
Poilievre has suggested in a National Post opinion piece that he will not oppose the tax changes on behalf of business lobbies, instead urging businesses to convince Canadians of the policy's flaws.
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