Arab Canada News
News
By Mounira Magdy
Published: June 10, 2024
The liberal government plans to take the first legislative step on Monday toward increasing the inclusion rate on capital gains.
Finance Minister Chrystia Freeland announced the timing on Sunday, stating that the government is taking action to improve tax fairness for Canadians.
Freeland announced changes to the capital gains tax as part of her April budget but left the new inclusion rate out of the budget legislation.
The government proposes to make two-thirds of capital gains subject to tax.
Currently, half of the profits realized from the sale of assets – such as stocks or secondary real estate – are taxed.
The liberals must present a proposal to the House of Commons before bringing forth the actual legislation on capital gains. The government says the change will take effect on June 25, even if the bill has not been passed yet.
The higher inclusion rate will apply to all capital gains realized by businesses, while individuals will only face the higher inclusion rate on capital gains exceeding $250,000.
Business and physician lobbying groups, who expect to be affected by the changes, have urged the government to reconsider the increase in the inclusion rate.
However, the liberals have defended the effective tax increase on capital gains, arguing that Canada needs to raise more revenue to cover costs for things like housing and healthcare.
The government estimates that the higher inclusion rate will generate $19.4 billion over the next five years.
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