The Canadian Federation of Independent Business (CFIB) voiced strong opposition to Finance Minister Chrystia Freeland’s proposed capital gains tax increase, aiming to block the measure before it becomes law. Blacklock's Reporter says this comes after a Budget Office estimate projected the proposal would cost taxpayers $17.4 billion.“Small business owners are not among Canada’s wealthiest,” said Christina Santini, national affairs director for the Federation. “They are the middle class. This is a lot of money to be taking out of their pockets.”Freeland’s June 11 Ways And Means Motion seeks to raise the tax on capital gains from the current 50% to 66%. MPs approved the motion by a vote of 208 to 118, a necessary step before amending the Income Tax Act. The tax itself has yet to be enacted, with cabinet proposing retroactive implementation from June 25 if Parliament approves the measure. “Everything is up in the air,” Santini remarked.“It is sloppy, it is murky,” added Santini. “We hope it doesn’t pass. We see the potential for many losers because of this.”The Budget Office indicated that the capital gains tax revenue would likely increase for Canadians planning to sell property within a year. Capital gains refer to the profits from selling assets such as businesses, farms, fishing boats, medical practices, commercial buildings, stocks, and vacation homes.“Capital gains are more volatile than other types of income, making them more difficult to predict as they are influenced by numerous factors such as market conditions,” stated the Budget Office Legislative Costing Note. Analysts highlighted that taxpayers had only a few days to respond to the proposed June 25 enforcement date.“There was significant uncertainty due to the absence of draft legislation which was only introduced on June 10,” the Costing Note explained, citing “limited time available for taxpayers to plan (in) the context of a minority government which introduces a level of uncertainty regarding adoption of these legislative changes.”The Commons finance committee will hold hearings on the proposal once Parliament reconvenes from its 13-week summer recess on September 16. “Stakeholders deserve to have their voices heard,” stated Conservative MP Adam Chambers (Simcoe North, Ont.) on June 13. He emphasized that capital gains are “a once or twice a lifetime event” for property owners typically of modest income.“The government, in an effort to start a class war, has made a mistake,” Chambers argued. “They don’t understand that it is landlords, self-employed individuals who incorporate, and individuals of modest incomes who will be paying.”
