(Ottawa) Federal Finance Minister Chrystia Freeland intends to ask Parliament to approve proposed changes to capital gains tax thresholds in a separate bill.
The most controversial measure of its recent federal budget is not included in the motion tabled Tuesday to present the federal budget to the House of Commons.
The motion includes many other measures announced in the April 16 budget, including the National School Feeding Program, updated first-time homebuyer assistance programs and tax changes for short-term rentals .
Tuesday’s motion, however, is silent on the proposal to adjust the portion of capital gains that is taxed, known as the “inclusion rate.”
Currently, the government taxes 50% of capital gains – profits made from the sale of assets, including stocks and real estate. Mme Freeland proposes to increase this inclusion rate to 66.6% for all corporations and any individual whose capital gains exceed $250,000 in one year.
These changes to capital gains taxation should be the subject of separate legislation. This procedure will force opposition parties to vote specifically on the proposed increase in the inclusion rate rather than considering this proposal as a single measure in a long list of budgetary policies for which they vote for or against, as a whole. .
At a time when young Canadians are increasingly unhappy with their prospects for homeownership, the Liberal government framed the proposed tax change around the idea of intergenerational fairness.
To help build more housing and restore economic hope to Generation Z and millennials, Prime Minister Justin Trudeau has argued that the richest Canadians need to contribute a little more to the public purse.
The federal Conservatives have not yet taken a position on the proposed tax changes.
This measure is expected to generate more than $19 billion in tax revenue over five years, which will help the Liberals finance a series of new spending in areas such as housing and national defense, announced in the budget.
The changes have sparked resistance from businesses, entrepreneurs and doctors, who expect to pay more taxes.
Mr. Trudeau and Mr.me Freeland argued that the changes were intended to ensure “fairness” in the tax system.
Three days after tabling the federal budget, the Quebec government announced that its tax system would be adjusted in order to harmonize it with five measures proposed in the recent federal budget, including this capital gains inclusion rate.