(Ottawa) A federal Conservative Party government would reverse the decision of the current Liberal government to increase the capital gains inclusion rate from the threshold of $250,000.
Posted at 7:27 a.m.
Conservative Leader Pierre Poilievre made the announcement Thursday morning. In his opinion, this measure, which was already a “bad idea”, becomes “pure madness” in the context where the American president-elect, Donald Trump, threatens to impose customs tariffs.
According to Mr. Poilievre, this “liberal anti-job tax” unfairly punishes entrepreneurs, doctors and farmers who are already heavily taxed, while depriving the Canadian economy of potential investments.
Before June 24, Canadians who realized capital gains, generally from the sale of an asset such as stocks or rental housing, only paid tax on half of the profit.
In its budget last spring, the government chose to increase this inclusion rate to two-thirds for the portion exceeding $250,000. The sale of a primary residence is always tax exempt.
This decision sparked negative reactions within the business community and among associations representing doctors.
During a vote specifically on this tax measure, held last June in the House of Commons, the Conservative Party was the only political group to have voted against.
Mr. Poilievre then argued that it was a “new tax” which would “increase the cost of food […]make doctors less available, and […] make paychecks smaller.”
Prime Minister Justin Trudeau responded that this position of the Conservatives demonstrated that they prefer to “defend advantages for the richest in this country”.
Uncertain future
The implementation of the capital gains tax hike is in an uncertain state, due to the prorogation of Parliament until the end of March.
The change was first mooted in the last budget, but was then separated from the rest of the financial plan in a notice of ways and means motion.
This motion never received royal assent because Parliament was deadlocked last year when the Conservatives began obstructing the government’s green technology fund.
Proroguing Parliament erases the parliamentary agenda, meaning motions that have not received royal assent would have to be reintroduced after the House of Commons resumes business.
This process could be delayed or abandoned altogether if the Liberals do not survive a widely expected confidence vote shortly after the start of a new parliamentary session on March 24.
Despite everything, the Canada Revenue Agency indicated that it would implement the government’s intentions.
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