The Canadian Taxpayers Federation (CTF) is urging Finance Minister Dominic LeBlanc to cancel a contentious capital gains tax hike, citing reports that its architect, former finance minister Chrystia Freeland, no longer supports the measure.
“If even the finance minister who introduced the capital gains tax hike no longer thinks it’s a good idea, then the government shouldn’t force Canadians to pay it,” said Franco Terrazzano, CTF Federal Director.
“LeBlanc must step in and immediately put an end to the undemocratic capital gains tax hike.”
The tax increase, introduced in Budget 2024 under Freeland, proposed raising the capital gains inclusion rate. However, Bloomberg recently reported that Freeland would drop the policy if she succeeds Justin Trudeau as Liberal leader.
The potential economic fallout from the tax hike has also drawn criticism. A CD Howe Institute report estimates the measure could cost Canada 414,000 jobs and shrink the GDP by nearly $90 billion.
Although a ways and means motion for the tax passed last year, the enabling legislation remains in limbo. Parliament is prorogued until March 24, 2025, and with opposition parties pledging to topple the Liberal government, the likelihood of the bill passing before the next federal election is slim.
Despite this, the Canada Revenue Agency (CRA) is reportedly proceeding with plans to enforce the tax hike.
“Conservative Party Leader Pierre Poilievre and Freeland said they would reverse the capital gains tax hike, and Liberal leadership candidates Mark Carney and Karina Gould should also pressure the government to stop this undemocratic tax grab,” said Terrazzano.
The CTF is calling on LeBlanc to halt CRA enforcement of the tax increase immediately. “This tax hike threatens to undemocratically take billions from Canadians and cripple our economy,” Terrazzano added.
With opposition mounting from within and outside the Liberal Party, the future of the tax hike remains uncertain.