The capital gains proposal will be presented to Parliament on Monday, Freeland says

OTTAWA — The Liberal government plans to take the first legislative step on Monday to increase the capital gains inclusion rate.

Finance Minister Chrystia Freeland signaled the moment Sunday, saying the government is taking steps to improve tax fairness for Canadians.

Freeland announced the capital gains tax changes as part of her April budget, but left the new inclusion rate out of the budget legislation.

The government proposes that two-thirds of capital gains should be taxable.

Currently, only half of the gains made on the sale of assets — such as stocks or secondary real estate — are taxed.

The Liberals must table a motion in the House of Commons before introducing the current capital gains legislation. The government says the change will take effect on June 25, even though a bill has yet to be approved.

The higher inclusion rate will apply to all capital gains made by corporations, while individuals will only face the higher inclusion rate on capital gains over $250,000.

Lobby groups representing companies and doctors expected to be affected by the changes have called on the government to reconsider increasing the inclusion rate.

However, the Liberals have defended the actual capital gains tax increase, arguing that Canada needs to raise more revenue to pay for things like housing and health care.

The government estimates that the higher inclusion rate will generate $19.4 billion over the next five years.

This report by The Canadian Press was first published on June 9, 2024.

The Canadian Press