Prime Minister Mark Carney announced Friday that the Canadian government will cancel the proposed increase in the capital gains inclusion rate, a move aimed at bolstering investment and supporting small businesses.
By maintaining the current capital gains inclusion rate, the government aims to strengthen Canada's ability to attract private spending, create jobs, and foster economic growth.
In addition to scrapping the tax hike, the government will proceed with its planned increase to the Lifetime Capital Gains Exemption limit, raising it to $1,250,000 for the sale of small business shares and farming and fishing property.
Legislation to formalize this change will be introduced in the near future.
“Canada is a country of builders,” said Carney.
“Cancelling the hike in capital gains tax will catalyze investment across our communities and incentivize builders, innovators, and entrepreneurs to grow their businesses in Canada, creating more higher paying jobs. It's time to build one Canadian economy — the strongest economy in the G7.”
Franco Terrazzano, federal director of the Canadian Taxpayers Federation told the Western Standard the tax increase should never have been proposed.
"The government should never have attempted to hit Canadians with this financial sucker punch," he said.
"This government is finally cleaning up its own mess, but doctors, entrepreneurs, accountants and people saving for their retirements need an apology for all the financial stress and uncertainty the government inflicted."
"The government tried to squeeze Canadians for as much money as it could get away with, but Canadians fought back and forced the government to back down from its capital gains tax hike."
"Cleaning up its own mess by reversing a tax increase is not enough, Canadians and our economy need massive tax cuts."
