The increase in the capital gains inclusion rate will ultimately not take place. The $250 check promised by the Trudeau government also fell through. Just like the bill to protect supply management in Canada. Overview of three files that died on the order paper due to the prorogation of Parliament and the resignation of Justin Trudeau.
Capital gain
In the spring of 2024, the Trudeau government announced changes to the capital gains inclusion rate as of June 25 of the same year. This rate was to increase from 50% to 66.7% for the portion of earnings exceeding $250,000.
However, this measure – very controversial – will ultimately not come into force. The year 2024 ended without the increase in the inclusion rate being able to be adopted by the Canadian Parliament. And now, the prorogation of parliament prevents its adoption for good.
Very few taxpayers were targeted by this measure, according to a recent study by the Chair in Taxation and Public Finance at the University of Sherbrooke. According to tax data analyzed in the study, approximately 0.16% of Canadian taxpayers declared a capital gain greater than $250,000 in 2019.
As a reminder, a capital gain corresponds to income derived from the sale of an asset (for example: shares, a chalet or a duplex) at a price higher than its acquisition cost. The rules on the capital gains inclusion rate will remain the same as before. In other words, whatever the value of the gain, half of it (50%) is added to a taxpayer’s taxable income. Note that this does not affect the capital gain from the sale of a principal residence, which is not taxed.
Check for $250
Another measure relegated to oblivion: the $250 check that the Trudeau government promised to send in the spring to Canadian workers who received a net annual income of less than $150,000 in 2023.
At the end of November, the Trudeau government had to abandon including this promise in its bill which allowed the adoption of the GST holiday. The measure was criticized by opposition parties because it excluded people who did not earn employment income, notably retirees and social assistance recipients. The income threshold for eligible people was also considered too high.
Supply management
The bill to protect supply management in the milk, poultry and egg sectors will ultimately also remain a dead letter. Submitted by the Bloc Québécois and supported by all federal parties, its objective was to prevent diplomats from making concessions in terms of supply management in trade negotiations with the United States.
The study of the bill in the Senate caused a stir. The senators were assessing the relevance of an amendment adopted in the Senate committee and which, according to the defenders of the bill, amounted to emptying it of its substance.
As President Donald Trump takes office, trade tensions are looming between the United States and Canada. The Republican president has already repeatedly indicated that the Canadian supply management system irritates him, since it harms the ability of American dairy producers to integrate into the Canadian market.
