Gould criticizes capital gains tax hike she once supported

Liberal leadership candidate Karina Gould voiced her opposition Thursday to her government’s proposed $17.4 billion increase in capital gains taxes, despite having voted for it seven months ago while serving as Government House Leader.

“I don’t think we got the capital gains tax increase right last year,” the Burlington, Ont. MP told reporters.

“I am having lots of conversations with the tech sector, with folks who are affected by it, to try and figure out what we can do to encourage growth and have more entrepreneurship here in Canada.”

The tax hike, introduced in the 2023 budget, proposed raising the inclusion rate on capital gains from 50% to 66%. It would apply to the sale of stocks, vacation properties, businesses, and other assets.

The 50% rate had been in place since 1972. Gould voted in favor of Ways and Means Motion No. 25, a necessary precursor to introducing the tax increase, which passed the Commons 208 to 118.

Cabinet defended the proposal as a measure for tax fairness, with then-Finance Minister Chrystia Freeland framing it as a choice between supporting working Canadians or wealthy elites.

“Canadians are watching,” Freeland told the Commons at the time. “Are [Conservatives] on the side of a nurse, a plumber, a teacher, or are they on the side of a multimillionaire?”

Freeland repeatedly criticized opponents of the tax hike, claiming they prioritized “the wealthy lobbyists” over average Canadians. However, a Bloomberg News report recently suggested Freeland herself now opposes the increase as she launches her own bid for Liberal Party leadership.

The proposed capital gains hike was never passed into law, but the Canada Revenue Agency (CRA) has announced plans to enforce it based on the government’s earlier announcements.

In a January 7 notice, the CRA warned taxpayers that penalties would apply to those who fail to comply. “For all taxpayers, the new inclusion rate will apply,” it said.

Liberal MP Ben Carr (Winnipeg South Centre), chair of the House affairs committee, also voiced doubts about the tax measure.

“I think part of the reason the capital gains changes were brought in was because we were trying to find a way to finance some of the commitments we had made,” he said.

“But I think over time there was a realization that perhaps we need to dial back a little bit on some of that spending.”

Gould acknowledged her party’s struggles to connect with Canadians, attributing some of the lost trust to decisions like the tax hike.

“Canadians have lost trust in our party,” she said. “Part of it is because I don’t think we responded to the issues they were telling us mattered to them.”