OTTAWA — Finance Minister Chrystia Freeland intends to ask Parliament to approve proposed changes to capital gains tax rates in a stand-alone bill.
The most controversial measure from her recent federal budget is not included in the motion she tabled Tuesday to introduce the federal budget in the House of Commons.
It includes many other measures announced in the budget April 16, including the national school food program, updates to programs that help first-time homebuyers and tax changes for people who own short-term rentals.
It does not say anything about the proposal to adjust the proportion of capital gains that get taxed, known as the inclusion rate. Right now the government taxes 50 per cent of capital gains, or profits made from the sale of assets including stocks and real estate. Freeland is proposing to increase that to two-thirds for all corporations and any individuals whose capital gains exceed $250,000 in one year.
The changes to capital gains taxation are expected to come in a separate piece of legislation.
That will force other opposition parties to take a position specifically on the proposed increase to the inclusion rate rather than it being just one item in a laundry list of budget policies they vote for or against as a whole.
At a time when younger Canadians are increasingly disgruntled about their home ownership prospects, the Liberal government has framed the proposed tax change around the idea of generation fairness.
To help get more homes built and restore economic hope for generation Z and millennials, Prime Minister Justin Trudeau has argued that wealthier Canadians need to pitch in a bit more.
The federal Conservatives have not taken a position yet on the proposed tax changes.
The increase to the inclusion rate is expected to generate more than $19 billion in tax revenues over five years, which will help the Liberals pay for a slew of new spending on things like housing and national defence.
The changes have sparked pushback from businesses, entrepreneurs and doctors who expect to pay more in taxes as a result of the changes.
Trudeau and Freeland have dismissed the pushback, arguing that the changes are about ensuring “fairness” in the tax system.
Freeland is planning to hold a news conference Tuesday afternoon alongside other cabinet ministers to discussion the motion.
This report by The Canadian Press was first published April 30, 2024.
Nojoud Al Mallees, The Canadian Press
