Details on capital gains changes finally released, but Canada is still in bad shape

financialpost.com:

The Parliamentary Budget Officer released a report last week that estimated the federal government will raise $17.4 billion in extra tax revenues over the next five years as a result of the proposed capital gains inclusion rate increase to two-thirds from 50 per cent. The federal budget, however, estimated the increase would raise $19.3 billion over that time frame. That $1.9-billion difference, or 9.8 per cent, is material.

The PBO also estimated the federal government would only raise $5 billion in 2024-2025 versus the $6.9-billion estimate in the 2024 federal budget — again a $1.9-billion difference, or 27.5 per cent.

Recall that the increased capital gains inclusion rate was announced on Budget Day, April 16, but the effective date of the increase was arbitrarily chosen to be June 25. The government was shamelessly encouraging Canadians to trigger capital gains on an accelerated basis during this roughly 10-week period to collect extra taxation revenues. The government worked this extra taxation revenue into its 2024/2025 budget to enhance the appearance that it was keeping the deficit within its announced target.

That is a disgusting way to do government budgeting and goes against the basic principle of investing: don’t let the tax tail wag the investment dog. Unfortunately, that is exactly what the government was encouraging Canadians to do.

I’ve criticized the government harshly for this encouragement and predicted the estimated tax revenues of $6.9 billion for 2024/2025 will be significantly less. Why? Well, for similar reasons that the PBO stated in its report. There simply was too little time and uncertainty to adequately plan in advance of the June 25 deadline. The draft legislation providing most of the