Poilievre Promises to Postpone Capital Gains Tax for Reinvested Proceeds in Canada; Singh Prioritizes First-Time Homebuyers

The release mentioned that investors won’t be taxed until later when they either cash out or move the money out of the country.

Named the Canada First Reinvestment Tax Cut, this proposed tax break will be applicable to any capital gains reinvested between July 1, 2025, and Dec. 31, 2026.

Poilievre believes that this tax break will act as “rocket fuel” for the Canadian economy and encourage investors to “reinvest and build things here.”

“The current capital gains tax locks up investment in old assets because selling them would incur a big tax bill,” said the Tory leader in a statement. “Therefore, they do not sell and reinvest in homebuilding, small businesses, technology, manufacturing, and more.”

“Allowing reinvestments without tax will unlock billions to immediately begin building, hiring, investing, and growing,” he added.

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In a video posted on social media on the same day, Poilievre stated that if his policy leads to an “economic boom” as he anticipated, he would consider making it permanent. Additionally, he assured small business owners and farmers that their current lifetime capital gains exemption will remain unchanged, allowing them to benefit from both this new deferral and their existing exemption.

The Conservative leader also highlighted that his proposal ensures that the government will eventually receive its share, but at a later and larger scale.

“The extra investment resulting from this policy will create more jobs and growth, compensating for much of the government’s short-term lost revenue,” he noted.

‘Economic Fortress’

Poilievre’s recent announcement builds upon what he promised in January when he said he would eliminate the capital gains tax hike if his party assumes power.

Ottawa proposed this hike in Budget 2024 in April last year under Prime Minister Justin Trudeau’s leadership. Previously, individuals were only taxed on half of the total capital gains earned in the year from selling their assets. under the proposal, this 50 percent inclusion rate would apply only to people’s initial $250,000 in capital gains, while two-thirds of any capital gains exceeding $250,000 would be taxable. For Canadian companies, two-thirds of their total capital gains would now be taxed, up from half.

The measure, set to come into effect on June 25, 2024, was approved through a ways and means motion in the House of Commons in June 2024 but was not formally implemented through legislation. Furthermore, it faced strong resistance from businesses, economists, and the Conservatives, who warned that the measures could drive investors away from Canada.

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