Uncertainty in Canada’s tax landscape could weigh on investment: economist

One economist says Canada needs more tax certainty, following the federal government’s move to raise the inclusion rate on capital gains taxes for corporations and some high-earning individuals.

Finance Minister Chrystia Freeland tabled the federal government’s 2024 budget on Tuesday. The government announced in the budget that it intends to raise the inclusion rate on capital gains taxes from one-half to two-thirds for all gains realized by corporations and trusts. However, the newly announced rate would only apply to individuals with gains above $250,000. 

“If every year we get a budget that changes the tax landscape and is picking arbitrarily winners and losers, I feel like that uncertainty might be really the factor that limits future investment,” James Orlando, the director of economics at TD Bank, said in an interview with BNNBloomberg.ca Wednesday. 

“It's a matter for businesses, you just need to have that level of certainty before you're able to commit to investment.”