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HomeCanadaContentious capital gains tax change to come to the House of Commons 

Contentious capital gains tax change to come to the House of Commons 

Canada: The Liberal government is moving forward with its contentious proposal to change the capital gains tax, scheduled to be presented in the House of Commons on Monday. This tax adjustment could have been incorporated into the 2024 budget bill submitted in April, but the Liberals opted for a separate legislative approach, aiming to gain political advantage over their primary rivals, the Conservatives.

Finance Minister Chrystia Freeland emphasized during a press conference on Sunday that only a small fraction of affluent individuals and corporations, roughly around 40,000, would see an increase in capital gains taxes.

She underscored that the proposed changes would entail individuals realizing over $250,000 in capital gains annually paying taxes on 66.7% of their gains, while those with gains up to $250,000 would continue to be taxed on 50% of their gains. For corporations and trusts, the inclusion rate would rise to two-thirds for all realized capital gains, with no set threshold.

Freeland asserted that the slight increase in capital gains taxes is anticipated to generate approximately $19 billion in new revenue over the next five years. These funds are earmarked to finance various new spending initiatives, such as housing and national defense.

Prime Minister Justin Trudeau recently announced that the tax amendment is slated to take effect on June 25.

Freeland portrayed this upcoming week as a pivotal moment for Canadian democracy, highlighting that it will reveal where each Member of Parliament stands on the issue.

Professionals including doctors and lawyers have vehemently opposed the capital gains tax change since its announcement, expressing concerns that their ability to retire and take breaks hinges on profits from their practices. The Canadian Medical Association (CMA) expressed deep disappointment in the federal government’s decision to proceed with the tax change, cautioning that it could place undue pressure and financial strain on physicians, thereby destabilizing the healthcare system.

Despite the Conservative Party’s stance on the matter remains unclear, leader Pierre Poilievre has been outspoken in his objection to both the capital gains tax change and the proposed 2024 budget. Poilievre characterized Trudeau as a fiscal “pyromaniac” in the House of Commons, accusing the Liberals of presenting a “wasteful” budget that exacerbates inflation and financial burdens for Canadians.

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