The capital gains hike was met with a swift backlash from business leaders
OTTAWA — Federal Conservatives are demanding the Liberals direct the Canada Revenue Agency to stop collecting the higher tax rate paid on capital gains worth more than $250,000, such as the sale of a vacation or rental property, until after Canadians go to the polls.
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The Opposition Tories laid out their request in a new letter to Finance Minister Dominic LeBlanc.
“As Minister of Finance, you have a responsibility to stop this job-killing tax hike before it does even more damage to our economy,” reads the letter signed by MPs Jasraj Singh Hallan and Adam Chambers and shared with National Post.
The critics continue: “If you refuse to do this, then at the very least, you must direct the Canada Revenue Agency to stop collecting this tax until after an election.”
Last year, the Liberals increased what is known as the capital gains inclusion rate, presenting it as a measure targeting wealthy Canadians and corporations to help fund government spending on measures meant to tackle housing affordability affecting younger Canadians.
At the time, former finance minister Chrystia Freeland characterized the move as being about “tax fairness,” saying that because of how investments are taxed, those near the top wind up paying a lower tax rate, compared to the working class.
The proposal was met with swift backlash from business leaders warning it would hurt entrepreneurs and other groups, such as the Canadian Medical Association, decrying it as being “detrimental” to doctors who own their practice.
Advocacy organizations representing farmers also voiced concern about the impact the changes would have on farming succession.
Although it was announced in last spring’s budget, the Liberals introduced the changes in a motion that was adopted by New Democrats and the Bloc Québécois.
Opposition Conservative Leader Pierre Poilievre rejected the proposal, calling it a “job-killing tax hike” at a time when Canadians and businesses were struggling under a higher cost of living.
The tax changes were set to take effect last June. However, the Liberals plan to legislate it into law failed by the time Governor General Mary Simon granted Prime Minister Justin Trudeau’s request to suspend Parliament until Mar. 24, following his decision to resign after Freeland’s stunning resignation from cabinet.
With Parliament suspended until March and all opposition parties promising to bring down the government in a non-confidence vote once Trudeau’s successor is chosen by Liberals, it is widely expected Canadians will go to the polls in the spring.
Amid confusion about what Parliament’s suspension meant for the capital gains tax increases, the Canada Revenue Agency clarified it would continue to administer the changes, given how they were introduced and passed by the House of Commons, which is how it applies other tax measures.
In their letter, the Conservatives take aim at the fact Trudeau failed to see his own measure even pass into law, vowing that should the party form government it will “never allow it to become law.”
“This chaos has real consequences for Canadians. You are taking money from small businesses without the consent of Parliament and have created a tax-filing nightmare for hard-working Canadians across our country,” it says.
“Worse still, by the time you finally allow Parliament to resume its work, it will have been almost twelve months since you first promised to introduce this capital gains tax hike in the budget. This means you have created a lawless state of limbo for Canadians by imposing a tax without ever passing it into law.”
Poilievre’s office pointed to a statement the agency made, outlining that should a bill fail to pass and the government decide to forgo the proposals, it would process returns for taxpayers.
National Post
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