Positives about the capital gains inclusion rate hike? Yep, here are three
June 25 is the day the capital gains inclusion rate increase comes into effect. Even though the particular legislation is not yet in a bill and thus not passed into law, it’s quite clear it will become so later this year with legal effect as of that day.
The measure quickly became a lightning rod of controversy when it was announced on April 16. By now, most of us are familiar with the deceptive messaging by the government, which continues to say the measure affects just 0.13 per cent of Canadians. It is also most certainly not needed to ensure “fairness,” nor to prevent the “rich” from living in ever-increasing “high walls” while the commoners are envious at their gates.
Frankly, the whole thing stinks. The taxation policy, lauded by some academics and ideologues, is poor. There is no doubt in my mind that it will spur the departure of successful Canadians and that investors will not look favourably on it when deciding whether to invest here.
Prior to June 25, the most common question that I received from concerned people was, “What should I do?”
While the federal government has shamelessly budgeted that many Canadians would rush to crystallize their affected assets under the lower taxation regime, and certainly some have, it’s been my experience that in many cases, the cost of triggering the tax prior to June 25 simply doesn’t make sense if you have the benefit of time and sufficient or stable rates of return.
Most people I have chatted with have also been interested in the political risk. “If the Conservatives win the next election in 2025, will they reverse these measures?” they ask.
That’s obviously something I cannot answer with certainty, but the Conservatives recently announced they would implement a tax reform
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