Taxpayers Federation urges immediate reversal of capital gains tax hike

Canadian Taxpayers Federation (CTF) is calling on Finance Minister Dominic LeBlanc to immediately cancel the capital gains tax hike, following Liberal leadership frontrunner Mark Carney’s commitment to reverse the increase if he becomes prime minister.

“The government’s capital gains tax hike is a big sign telling entrepreneurs to set up shop in other countries before next year,” said Franco Terrazzano, Federal Director of CTF. 

“Every candidate with a shot at becoming prime minister says they will scrap the capital gains tax hike, so LeBlanc needs to end it now.”

LeBlanc recently postponed the enforcement of the tax hike from June 25, 2024, to January 1, 2026. However, calls to eliminate the increase altogether have intensified, particularly as Carney, along with fellow Liberal leadership contender Chrystia Freeland and Conservative Party Leader Pierre Poilievre, have all vowed to reverse the tax.

The CTF argues that the tax increase would have devastating effects on Canada’s economy. A recent report from the C.D. Howe Institute projects that the measure will lead to over 400,000 fewer jobs and shrink GDP by nearly $90 billion. Additionally, the Tax Foundation’s 2024 International Tax Competitiveness Index ranks Canada thirty-first out of 38 OECD countries in individual tax competitiveness and twenty-sixth in business tax competitiveness, with capital gains taxation cited as a key weakness.

“Canada couldn’t afford the capital gains tax hike before, and we definitely can’t afford the $90-billion hole it will blow through Canada’s economy now,” said Terrazzano. 

“LeBlanc must improve Canada’s competitiveness by ending the capital gains tax hike now.”

The CTF has also launched a legal challenge against the Canada Revenue Agency, arguing that enforcing the tax hike without parliamentary approval violates the rule of law and is unconstitutional.

With mounting political opposition and economic concerns, the pressure is growing for the federal government to scrap the increase altogether.