Taxpayers force government to end capital gains tax hike
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OTTAWA, ON: The Canadian Taxpayers Federation welcomes the reversal of the government’s proposed capital gains tax hike and is calling on all party leaders to commit to further tax relief.
“The government should never have attempted to hit Canadians with this financial sucker punch,” said Franco Terrazzano, CTF Federal Director. “This government is finally cleaning up its own mess, but it owes an apology to doctors, entrepreneurs, accountants and people saving for their retirement for all of the uncertainty and costs inflicted by this failed policy.”
The CTF filed a lawsuit against the government and its illegal and undemocratic capital gains tax hike. One week later, the government announced it would delay the tax increase until 2026.
Now the federal government has officially canceled the tax hike.
The federal government proposed a capital gains tax increase in Budget 2024. It would have cost taxpayers $6.9 billion this year.
However, the government failed to introduce, debate, pass or proclaim the necessary legislation. The Canada Revenue Agency repeatedly stated its intension to collect the tax even without legislative authority. The CTF’s court challenge argues that it’s unconstitutional to collect a tax without a vote in the House of Commons.
Today, the government finally announced it “will cancel the proposed hike in the capital gains inclusion rate.”
“The government tried to squeeze Canadians for as much money as it could get away with, but Canadians fought back and forced the government to back down from its capital gains tax hike,” Terrazzano said. “Cleaning up its own mess by reversing a tax increase is not enough, Canadians and our economy need massive tax cuts.”
A report from the C.D. Howe Institute estimated the capital gains tax increase would result in 414,000 fewer jobs and shrink Canada’s GDP by nearly $90 billion.
Canada ranks 31 out of 38 OECD countries on individual tax competitiveness, and 26th on business tax competitiveness, according to the Tax Foundation. Canada ranks behind the U.S. on both measures.