The Chartered Professional Accountants of Canada is criticizing the tax-and-spend approach of the federal government reflected once again in the budget.“This is not a game-changing budget. It continues Canada on the path of increased spending and taxation, leaving longer-term challenges such as productivity and competitiveness largely unaddressed and kicking the fiscal responsibility can down the road,” says CPA Canada’s Chief Economist David-Alexandre Brassard.Budget 2024 laid out plans to raise the annual inclusion rate for individuals’ capital gains of more than $250,000 from one-half to two-thirds. In addition, the inclusion rate for corporations and trusts will automatically rise to two-thirds, effective June 25.The plan is aimed at wealthy Canadians, but members of the middle class, such as farmers, business owners or cottagers selling their assets could also be affected.“We are relieved the government didn’t increase the capital gains inclusion rate in its entirety, but having this two-tiered system does, once again, add complexity into our income tax system,” says John Oakey, CPA Canada’s vice-president of tax.The tax measure is projected to help offset billions in new spending, much of which is aimed at a lofty plan to build 3.87 million new homes by 2031.“There are limits to how much we can build,” Brassard cautions. “Although ambition is a noble thing, directing too much new spending into the housing sector risks further inflating construction costs and home prices, which could counteract the government’s affordability goals.”
