Chrystia Freeland confirms the legislative process to raise the inclusion rate will begin before summer
The Liberal government will present its proposal to increase the inclusion rate on capital gains to the House of Commons before the parliamentary summer break, according to Finance Minister Chrystia Freeland.
In a report by BNN Bloomberg, Freeland confirmed during a news conference that the legislative process to implement the increase in the inclusion rate will begin in the coming weeks and certainly before the House rises.
Freeland announced the capital gains tax changes in her April budget but excluded the new inclusion rate from the budget legislation she tabled last month.
The Liberals need to table a motion in the House of Commons before introducing the actual legislation. Even if the bill has not yet passed, the change will take effect on June 25.
The proposed change would make two-thirds of capital gains taxable, compared to the current rate where only half of the profits made on asset sales, such as stocks or secondary real estate, are taxed.
The higher rate will apply to all capital gains realized by corporations, while individuals will only be affected on capital gains exceeding $250,000.
The proposal has attracted considerable attention and opposition. Business and physician lobby groups have urged the government to reconsider the inclusion rate increase. However, Liberals argue that the tax increase is necessary to raise revenue for housing and health care.
The government estimates that the higher inclusion rate will generate $19.4bn over five years. By introducing the capital gains tax changes in a stand-alone bill, every federal party will have to take a clear stance on the proposal.
Conservative Leader Pierre Poilievre has not yet clarified his party's position on the tax changes, as he seeks to appeal to working-class voters. Freeland criticized Poilievre for avoiding a definitive stance on the issue.
Freeland stated that Canadians should demand a clear answer from the Conservatives on tax fairness, and depending on their response, it will be evident whose side they are on.
The Conservatives did not immediately comment. While they quickly opposed the budget last month, they have yet to declare their position on the capital gains bill.
In an opinion piece for the National Post, Poilievre suggested that businesses need to convince Canadians why the policy is unfavourable, rather than expecting political intervention.
