Conservative leader Pierre Poilievre and his party opposed the Liberals' plan to increase the inclusion rate for capital gains in Canada on Tuesday, in a vote that passed with the support of the New Democratic Party and the Bloc Quebecois.

This proposal, which paves the way for the Liberals to introduce legislation to change Canadian tax laws accordingly, was approved by the House of Commons by a majority of 208 votes to 118.

To help offset billions in new spending on housing and support for social safety nets, Finance Minister Chrystia Freeland announced in April's budget an upcoming increase in the amount of taxes that high-income earners must pay on the sale of assets or investments, such as stocks and secondary properties.

This move — which will take effect on June 25 — will raise the capital gains inclusion rate from 50 percent to 67 percent for individuals earning more than $250,000 in capital gains in a year, and on all capital gains earned by corporations and most types of trusts.

While the Conservatives have resisted for weeks in opposition to this tax change — estimated to raise $19.4 billion over five years — the proposal was quickly criticized by business groups as a "short-sighted" way to improve the deficit. Doctors, businesspeople, and farmers were among its critics.

In defense against these voices, the Liberals argued that the changes would only affect the wealthiest 0.13 percent, and about 12 percent of Canadian businesses, given that the current exemption for capital gains on primary residences will remain in place, while the lifetime exemption limits for small business shares, as well as agricultural and fishing properties, are set to increase.

Freeland chose to withdraw this major tax reform from the budget implementation bill, forcing the Conservatives to come up with a clear position, and it is now likely to create lines of attack for each side in the summer.

Poilievre outlines reasons for opposition

Speaking in the House of Commons just hours before the "no" announcement, Poilievre explained the reasons why the Conservatives oppose the "job-killing tax on health care, homes, farms, and small businesses."

"It's Trudeau who wants to tax doctors when we have a shortage of doctors. He wants to tax homebuilding companies when we have a housing shortage. He wants to tax farmers when we face a food price crisis, and he wants to tax small businesses when we have a housing shortage." Poilievre said that our economy is already shrinking.

"The good news is that if you are a billionaire, you won't pay a dime. The Prime Minister has given you two full months to sell your assets and take your money out of Canada to start a business south of the border or somewhere far away."

Poilievre also clarified on Tuesday what a Conservative government would do differently, including forming a "tax reform task force" within 60 days of taking office as Prime Minister and designing a "home tax cut."

The Conservatives also plan to cut taxes on employment and "make things," simplify tax rules, and reduce "the tax burden on the poor and middle class," while cutting tax-funded corporate welfare and cracking down on offshore tax havens.

Show "true colors," say the Liberals

As soon as Poilievre clarified his position, the Liberals accused the Conservatives of protecting Canada's wealthiest by voting against tax fairness.

Prime Minister Justin Trudeau said, "If it doesn't have real impacts on Canadians, it would be funny to see the Conservative leader tie himself in knots trying to justify voting for the benefits that wealthy Canadians receive when they sell truly profitable investments."

"We're asking them to pay a little more so that we can invest more in housing for young people so they can have the same opportunities that previous generations had."

In a later conversation with a Conservative MP, Freeland described it as "an important day for Canadians."

She said, "Because today, after eight weeks of truly embarrassing hesitation and backtracking, the Conservatives have finally shown their true colors, and now we know what they really stand for. They had the chance to stand with plumbers, welders, nurses, and teachers, but they decided that millionaires should pay less tax than working Canadians."