Improve competitiveness, end capital gains tax hike immediately
OTTAWA, ON: The Canadian Taxpayers Federation is calling on Finance Minister Dominic LeBlanc to end the capital gains tax hike following Liberal leadership front-runner Mark Carney’s commitment to reverse the tax increase.
“The government’s capital gains tax hike is a big sign telling entrepreneurs to set up shop in other countries before next year,” said Franco Terrazzano, CTF Federal Director. “Every candidate with a shot at becoming prime minister says they will scrap the capital gains tax hike, so LeBlanc needs to end it now.
“Especially with a looming trade war, the easiest way for the government to make Canada’s economy more competitive is by immediately ending the capital gains tax hike.”
LeBlanc announced that the government is postponing enforcement of the capital gains tax increase from June 25, 2024, to Jan. 1, 2026.
Today, Carney announced he would reverse the capital gains tax increase if he becomes prime minister. The other Liberal leadership front-runner, Chrystia Freeland, also promises to reverse the tax increase. Conservative Party Leader Pierre Poilievre says he would reverse the capital gains tax increase.
A recent report from the C.D. Howe Institute shows the capital gains tax hike will result in more than 400,000 fewer jobs and shrink Canada’s GDP by nearly $90 billion.
The Tax Foundation’s 2024 International Tax Competitiveness Index ranked Canada 31st out 38 Organisation for Economic Co-operation and Development countries on individual tax competitiveness, and 26th on business tax competitiveness. Weaknesses of Canada’s tax system include taxing capital gains “well above” the OECD average.
“Canada couldn’t afford the capital gains tax hike before and we definitely can’t afford the $90-billion hole it will blow through Canada’s economy now,” Terrazzano said. “LeBlanc must improve Canada’s competitiveness by ending the capital gains tax hike now.”
The CTF launched a legal challenge to stop the Canada Revenue Agency from enforcing the tax hike without parliamentary approval. The CTF’s legal application argues that enforcing the tax increase violates the rule of law and is unconstitutional.