Business groups walk back claim on share of Canadians hit by capital gains changes
Posted May 9, 2024 1:06 pm.
Last Updated May 9, 2024 2:28 pm.
Prominent business groups are backtracking their claim that one in five Canadians would be affected by the federal government’s proposed changes to capital gains taxation.
In a letter sent to Finance Minister Chrystia Freeland Thursday, the Canadian Chamber of Commerce and other groups said the government’s assertion that only the wealthiest Canadians will be affected was misleading.
“In fact, one in five Canadians will be directly impacted over the next 10 years and the effects of this tax hike will be borne by all Canadians, directly or indirectly,” the original letter reads.
But the study from which that figure was taken suggests otherwise.
The 2023 study by Simon Fraser University’s Jonathan Rhys Kesselman estimates one in five Canadians would be affected over a 10-year period if the inclusion rate was increased on all capital gains.
The federal budget only increases the inclusion rate on capital gains above $250,000, which means a much smaller portion of Canadians would end up paying higher taxes.
After The Canadian Press asked questions about the figure, the chamber of commerce changed the letter on its website to read that one in five companies would be directly affected.
“We looked into this, and upon review, the language could be more clear to reflect the impact on Canadian companies. We have adjusted the copy in the letter online,” said spokesman Karl Oczkowski in an email.
The joint letter from the Canadian Chamber of Commerce and other industry associations calls on the Liberal government to scrap the tax increase.
The federal budget proposes making two-thirds of capital gains — the profit made on the sale of assets — taxable, rather than one-half.
The increase in the inclusion rate would apply to capital gains above $250,000 for individuals, and all capital gains realized by corporations.
The federal government estimates that in any given year, 0.13 per cent of Canadians would pay higher taxes on their capital gains.
