Former Liberal Finance Minister Morneau Slams New Budget, Warning it Could Harm Investment Opportunities
A former federal finance minister is criticizing portions of the federal budget that was unveiled on April 16.
Bill Morneau, who served as Liberal finance minister from 2015 to 2020, voiced his concerns about potential tax increases on capital gains during his tenure, fearing it could hinder investment.
During a post-budget webcast hosted by accounting firm KPMG on April 17, Morneau stated, “This was very clearly something that while I was there, we resisted. Concerned about the growth of the country.”
He warned that the tax changes could deter investors and companies from choosing to invest in Canada, negatively impacting long-term economic growth and productivity.
Additionally, Morneau pointed out that the capital gains tax increase could affect individuals and businesses, creating a disincentive for investment.
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Businesses will now be taxed on 66.7 percent of their capital gains, up from 50 percent.
The Finance Minister, Chrystia Freeland, justified the capital gains tax increase as a measure to create a fairer tax system, particularly benefiting younger Canadians striving to match their parents’ economic status.
Despite the government’s assertion that the tax hike targets only the wealthiest, financial experts warn of broader implications.
Morneau expressed concerns about the impact on GDP per capita and lagging productivity compared to other countries like the United States.
He emphasized the need for increased investment in the Canadian economy and criticized the capital gains tax changes as counterproductive.
Not all reactions to the tax increase are negative. The Canadian Labour Congress (CLC) commended the move, though they called for further measures to alleviate the cost of living pressure facing many workers.
Ultimately, Morneau stressed the importance of prioritizing economic growth for Canada’s future prosperity.
