The federal government is likely to reverse course on changes to the capital gains tax that were announced in the last federal budget, CBC News has learned.Â
The Liberal government could delay implementing those changes, according to a high-level source. Â
The exact plan hasn’t been finalized, but a key option on the table includes the government ordering the Canada Revenue Agency (CRA) to stop collecting the new taxes for now.
Delaying collection would likely push any final decision about the changes until after the next federal election, which could effectively kill the tax increase.
Canada’s capital gains tax increase comes into effect on June 25. Andrew Chang breaks down some misleading claims about the changes coming from both sides of the political aisle and explains who is likely to pay the new tax, how much and how often. Does it really just hit the ultra-rich?
The CRA had been collecting the increased tax rate already, as if it had taken effect, even though the relevant legislation had not been passed and was functionally dead after Prime Minister Justin Trudeau prorogued Parliament.
The 2024 budget had proposed increasing taxes on capital gains above $250,000 for individuals, changing what is called the “inclusion rate” from one-half to two-thirds for them.
All capital gains for corporations and trusts would have increased to two-thirds as well under the proposals.
The changes were unpopular with business groups, including many in the technology and medical sectors.Â
