(Ottawa) The Liberals plan to take the first legislative measure this Monday to increase the capital gains inclusion rate.
Finance Minister Chrystia Freeland made the announcement Sunday, saying the government was taking steps to improve tax fairness for Canadians.
Mme Freeland introduced changes to the capital gains tax as part of his April budget, but left the new inclusion rate out of the budget legislation.
The government is proposing to make two-thirds of capital gains taxable.
Currently, only half of the profits made on the sale of assets – such as shares or secondary real estate – are taxed.
The Liberals must table a motion in the House of Commons before introducing the capital gains bill. The government says the change will come into effect on June 25, although no bill has yet been passed.
The higher inclusion rate will apply to all capital gains made by businesses, while individuals will only face the higher inclusion rate on capital gains over $250,000.
Lobby groups representing businesses and doctors who expect to be affected by the changes have called on the government to reconsider increasing the inclusion rate.
However, the Liberals have defended an effective increase in the capital gains tax, arguing that Canada needs to generate more revenue to finance things like housing and health care.
The government estimates that the increase in the inclusion rate will generate 19.4 billion over the next five years.