Poilievre Vows to Reverse Increase in Capital Gains Tax

January 16, 2025 TruthUSA

Conservative Party Leader Pierre Poilievre stated that a Tory government would eliminate the increase on the capital gains tax due to worries about job losses and potential tariffs from the upcoming U.S. administration.

“I am pleased to announce that common sense Conservatives will reverse the Liberal tax hike on capital gains from last June—an increase that economists believe will result in the loss of 400,000 jobs,” Poilievre shared on social media platform X on Jan. 16.

Poilievre emphasized that the concept was questionable even before U.S. President-elect Donald Trump’s threat of imposing 25 percent tariffs on Canada, and now he deems it as “outright insanity.”

The Liberal government introduced the capital gains tax raise in Budget 2024, and it was subsequently approved by the House of Commons in June through the passing of a ways and means motion. The Conservatives were the sole opposition to this change.

The inclusion rate was raised from one-half to two-thirds for annualized gains over $250,000 for individuals, and for all capital gains for most types of trusts. According to the Parliamentary Budget Officer’s estimate, this adjustment is projected to increase government revenues by $17.4 billion between the fiscal years 2024-2025 and 2028-2029.

Former Finance Minister Chrystia Freeland mentioned that the raise was necessary for more “fairness” in Canada’s tax system and to fund housing investments.

“This additional revenue will help reduce the cost of living for millions of Canadians, especially Millennials and Gen Z,” Freeland stated in a press release. “It will support our efforts to accelerate the construction of 4 million more homes.”

The legislation to enact the tax increase by amending the Income Tax Act was never officially passed. Freeland presented a motion to introduce a corresponding bill in September, but it was not put to a vote. The House was preoccupied with issues regarding the federal green fund documents in the autumn, and Parliament was prorogued early in January, resulting in the government’s entire legislative agenda being abandoned.

‘Standard Procedure’

The governor general prorogued Parliament on Jan. 6 at the prime minister’s request. Nina Ioussoupova, a spokesperson for the Canada Revenue Agency (CRA), informed The Epoch Times that the agency will continue to administer the proposed capital gains legislation during prorogation.

While these proposed revisions are “pending parliamentary approval,” CRA will “operate based on the directives outlined by the government, which aligns with established practices for administering the capital gains tax,” mentioned Ioussoupova.

“According to parliamentary customs, tax proposals take effect as soon as the government tables a Notice of Ways and Means Motion. This approach ensures uniformity and fairness in the treatment of all taxpayers,” she added.

CRA assured that they will be prepared to assist taxpayers and provide refunds if the government decides not to proceed with the legislation or signals an intention to follow through with the tax increase once Parliament reconvenes on March 24.

Furthermore, the government is also at risk of facing a vote of non-confidence from opposition parties. The newly elected leader of the Liberal Party on March 9 could also opt to request the dissolution of Parliament from the governor general to prompt an election.

The absence of legislation supporting the capital gains tax hike and the likelihood of a spring election are causing concerns.

This week, Conservative MPs reached out to Finance Minister Dominic LeBlanc to halt the tax collection by CRA until after an election.

“You are accountable for stopping this harmful tax increase that will further harm our economy,” the respective finance and revenue critics, MPs Jasraj Singh Hallan and Adam Chambers, wrote.

They referenced reports from the C.D. Howe Institute indicating that the tax increase could reduce per-capita GDP by 3 percent and lead to the loss of 414,000 jobs.

By publication time, there was no response from the finance minister’s office when contacted for a comment.

Various business organizations, including the Canadian Chamber of Commerce, have requested more clarity from the government regarding the tax adjustment amid the parliamentary prorogation.

“With the recent prorogation of Parliament, the capital gains hike remains a significant concern for Canadians and businesses, who are uncertain about how to manage their affairs and whether this change will be enforced in the future,” stated Jessica Brandon-Jepp, the Chamber’s senior director.

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