The liberal government plans to take the first legislative step today, Monday, towards increasing the inclusion rate on capital gains.

Finance Minister Chrystia Freeland announced the timing yesterday, Sunday, stating that the government is taking steps 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 taxable.

Currently, half of the profits realized from the sale of assets - such as stocks or secondary properties - are taxed.

The liberals must present a proposal to the House of Commons before the actual legislation on capital gains is put forward.
The government says the change will take effect on June 25, even if the bill has not yet been passed.

The higher inclusion rate will apply to all capital gains realized by corporations, while individuals will only face the higher inclusion rate on capital gains exceeding $250,000.

Pressure groups representing businesses and doctors who expect to be affected by the changes have urged the government to reconsider the increase in the inclusion rate.

However, liberals have defended the effective tax increase on capital gains, arguing that Canada needs to collect 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.