The increase in capital gains taxation beyond the threshold of $250,000 will harm the Canadian economy, worries the president and CEO of the National Bank, Laurent Ferreira, in an interview.
The banker fears that the measure will discourage investment in Canada. “I think the environment for risk-taking is increasingly negative,” he lamented in an interview on Friday, on the sidelines of the shareholders’ meeting.
Canada will become less competitive compared to the United States, according to him. “Before the federal budget, the long-term capital gains tax, there was a gap […] about 5%-6%. There, we are at 16%. It will have an impact. »
“It increases the cost of capital for businesses,” he adds. There is also a certain discouragement, which will set in among the investor. »
He is also concerned about the poor productivity performance of the Canadian economy over the past fifteen years.
In Tuesday’s federal budget, the Trudeau government announced that two-thirds of capital gains will be taxed, rather than half, from the threshold of $250,000, as of June 25. Quebec will also follow suit at the federal level.
The Minister of Finance, Chrystia Freeland, said at a press conference that the threshold of $250,000 had been determined “precisely” to “target those who have the greatest opportunity to pay a little more to finance equity programs “.
Mr. Ferreira retorts that “perhaps we [le gouvernement] spend too much.”
“After that, we also have to see what type of productivity we are going to obtain with these expenses,” he emphasizes. The proportion of jobs created in the public service has exploded in Canada compared to the private sector. For me, this is a source of concern. »
The head of the National Bank adds that we must preserve the social fabric in Canada, but “to achieve this, we must build a strong economy.”