The leader of the Conservative Party of Canada, Pierre Poilievre, says he is guided by “common sense” in voting against the increase in the capital gains inclusion rate, a measure intended to increase taxes for a handful of taxpayers among the most fortunate.
“Why is it that every time he promises to raise taxes on the rich, it’s the poor and middle class who end up footing the bill? » accused the leader of the official opposition in the Commons on Tuesday, referring to Justin Trudeau and his government.
Pierre Poilievre will thus have kept the suspense until the last day concerning his position on one of the main new measures of the last federal budget, since all elected officials had to decide on the question during a vote, a little later Tuesday.
Since April, the Trudeau government has been proposing to increase the tax on capital gains for those who declare the most. Until now, all capital gains benefited from a 50% tax exemption, but from June 25, this inclusion rate will increase to two dollars out of three (66.7%) for capital gains of individuals exceeding $250,000 in a year. Any capital gains made by businesses will similarly be subject to more tax.
Different exemptions apply, such as the sale of a principal residence, which remains tax-exempt. The details of the tax measure were clarified Monday in a “ways and means” motion tabled in the House, a dense 59-page technical document submitted to a vote on Tuesday.
208 MPs from the Liberal Party, the Bloc Québécois, the New Democratic Party (NDP) and the Green Party unsurprisingly adopted the motion, which was rejected by 116 Conservative MPs as well as independents Alain Rayes and Kevin Vuong.
For the richest
According to calculations by the Ministry of Finance, the new measure makes no difference for the poorest 99.87%, or 31.5 million Canadians. It will result in an increase in tax paid by a tiny minority, i.e. 0.13% of taxpayers, or 40,000 people. These richest people report an average income of $1.4 million per year.
During Tuesday’s question period, monopolized by this subject, the Conservatives united to denounce this increase, which according to them could have disproportionate impacts on certain Canadians.
“The tax will eat up the inheritance. They will leave less to their children! » for example chanted in the chamber the conservative Quebec MP Pierre Paul-Hus.
“We are jeopardizing the success of true intergenerational transfers of farms to young farmers across Canada! […] How is this fair for future generations of farmers? » also denounced his colleague Luc Berthold.
Canada’s Finance Minister, Chrystia Freeland, responded that her government was also increasing the exemption for farmers. She argues that “Quebec also needs revenue, for example for health care.” The Quebec government is also increasing its capital gains taxation.
“Unfair” to tax capital
Pierre Poilievre’s office did not wish to specify Duty the leader’s position on this issue no later than Monday. After several weeks of silence, Mr. Poilievre detailed his opposition to the measure in a fifteen-minute video published Tuesday on social networks.
We hear the Conservative leader cite the work of the Scottish economist Adam Smith, who died in 1790, to explain what capital is, then revisit the history of the 20the century by asserting that “communists and fascists tried to oppose labor to capital”.
According to Mr. Poilievre’s view of things, capital is already taxed and constantly eaten up by inflation, which makes him say “that adding new taxes [au capital] is unfair.” This will have the effect of driving away investments from Canada to the United States and generally harming Canada’s productivity, he believes.
Mme Freeland reiterated Tuesday that the expenses associated with the new government programs justify this tax increase, such as a program that must cover the cost of contraceptives and drugs to treat diabetes. “Canada could finance these essential investments by taking on more debt, but that would be an unfair burden on younger generations. »
The Parliamentary Budget Officer (PBO) is currently working to verify the figures put forward by the Trudeau government on capital gains taxation. His report is expected this summer.