Capital gains tax changes aren’t in the budget bill — but still coming: Freeland

Canada's Finance Minister Chrystia Freeland affirmed her commitment to introduce changes to how capital gains are taxed, despite the measure not being included in the budget bill.

A plan to change how capital gains are taxed in Canada is not included in the Liberals’ bill to implement the 2024 federal budget, but Finance Minister Chrystia Freeland says the government is still committed to the plan.

Freeland tabled the Budget Implementation Act in the House of Commons on Tuesday, which included plans to introduce a swath of measures introduced in the Liberals’ spending plans unveiled on April 16.

One of the ways the Liberals planned to fund its latest spending plans was with a change to how capital gains — net profit from the sale of an asset like a stock or investment property — are taxed in Canada.

Budget 2024 proposed to raise the inclusion rate on those proceeds to 66.7 per cent for all corporations and trusts and for individuals making more than $250,000 in capital gains annually. For individuals, any such gains made under that bar would continue to face the current inclusion rate of 50 per cent.

While not included in the budget implementation bill, Freeland confirmed to reporters on Tuesday that the legislation for capital gains tax changes is still coming.

“We are very committed to the capital gains measures that we put forward in the budget,” she said during a press conference in Ottawa.

The increase to the inclusion rate is expected to generate more than $19 billion in tax revenues over five years, which will help the Liberals pay for a slew of new spending on things like housing and national defence.

Freeland said that the revenue from raising the inclusion rate on capital gains is necessary to pay for the “essential investments” elsewhere in the budget, which the Liberals have pitched as ensuring “fairness” for all generations. She reiterated her argument that it’s “absolutely fair to ask those who are at the very top to contribute a little bit more.”