Canadian Taxpayers Federation (CTF) is urging the Canada Revenue Agency (CRA) to cease enforcement of a controversial capital gains tax hike, warning it could devastate the economy and result in significant job losses.
The demand comes as a report from the CD Howe Institute estimates that the proposed tax increase could eliminate 414,000 jobs and reduce Canada’s GDP by nearly $90 billion within five years. The Trudeau government’s plan would raise the capital gains inclusion rate for the first time in 25 years, but the necessary legislation has not yet been introduced or passed.
“Enforcing the capital gains tax hike before it’s even law is not only undemocratic overreach by the CRA, but new data reveals it could also destroy over 400,000 Canadian jobs,” said Devin Drover, CTF General Counsel and Atlantic Director.
“The solution is simple: the CRA shouldn’t enforce this proposed tax hike that hasn’t been passed into law.”
Despite Parliament being prorogued until March 24 and opposition parties pledging to topple the Liberal government, the CRA has reportedly begun enforcing aspects of the tax hike. Critics argue that this oversteps the authority of the CRA, as the measure has not been debated or approved by lawmakers.
“It’s Parliament’s job to approve tax increases before they’re implemented, not the unelected tax collectors,” said Drover.
“Canadians deserve better than having their elected representatives treated like a rubberstamp by the prime minister and the CRA.”
The CTF emphasized that the timing of the enforcement is particularly troubling given the significant economic repercussions outlined in the CD Howe Institute’s report. The organization is calling on the CRA to halt its actions immediately, warning that moving forward risks undermining democratic processes and further harming Canadians.
With Parliament set to resume in March and a federal election potentially on the horizon, the future of the proposed tax hike remains uncertain. For now, the CTF insists that the CRA’s enforcement efforts are premature and could inflict unnecessary damage on Canada’s economy.