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Higher Capital Gains Taxes cap off a loser federal budget

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5 minute read

From Frontier Centre for Public Policy

By Lee Harding

Even former Liberal Finance Minister Bill Morneau told the Financial Post the capital gains tax increase would be “very troubling for many investors.” He added, “I don’t think there was enough effort in this budget to reduce spending, to create that appropriate direction for the economy.”

New taxes on capital gains mean more capital pains for Canadians as they endure another tax-grabbing, heavy-spending federal deficit budget.

Going forward, the inclusion rate increases to 66 per cent, up from 50 per cent, on capital gains above $250,000 for people and on all capital gains for corporations and trusts. The change will affect 307,000 businesses and see Ottawa, according to probably optimistic projections, rake in an additional $19.4 billion over four years.

A wide chorus of voices have justifiably condemned this move. If an asset is sold for more than it was bought for, the government will claim two-thirds of the value because half is no longer enough.  It’s pure government greed.

If you were an investor or a young tech entrepreneur looking for somewhere to set up shop, would you choose Canada? And if you’re already that investor, how hard would you work to appreciate your assets when the government seizes much of the improvement?

Even before this budget, the OECD predicted Canada would have the lowest growth rates in per-person GDP up to 2060 of all its member countries.

In a speech in Halifax on March 26, Bank of Canada senior deputy governor Carolyn Rogers put the productivity problem this way: “You’ve seen those signs that say, ‘In emergency, break glass.’ Well, it’s time to break the glass.”

What can Canadians bash now? Their heads against a wall?

Even former Liberal Finance Minister Bill Morneau told the Financial Post the capital gains tax increase would be “very troubling for many investors.” He added, “I don’t think there was enough effort in this budget to reduce spending, to create that appropriate direction for the economy.”

No kidding. Not since the first Prime Minister Trudeau (Pierre) have Canadians been able to count so reliably on deficit spending, higher expenditures, and more taxes.

Long ago, it seems now, when Justin Trudeau was not yet prime minister, he campaigned on “a modest short-term deficit” of less than $10 billion for each of the first three years and a balanced budget by the 2019-2020 fiscal year.

His rationale was that low interest rates made it a rare opportunity to borrow and build infrastructure, all to encourage economic growth. Of course, the budget never balanced itself and Canada has lost $225 billion in foreign investment since 2016.

The deficits continue though the excuse of low interest rates is long gone. Despite higher carbon and capital gains taxes, this year’s deficit will match last year’s: $40 billion. Infrastructure seems less in view than an ever-expanding nanny state of taxpayer-funded dental care, child care, and pharmacare.

Of course, the Trudeau deficits were not as modest as advertised, and all-time federal debt has doubled to $1.2 trillion in less than a decade. Debt interest payments this coming fiscal year will be $54.1 billion, matching GST revenue and exceeding the $52 billion of transfers to the provinces for health care.

In 1970, columnist Lubor Zink quoted Pierre Trudeau as saying, “One has to be in the wheelhouse to see what shifts are taking place . . . The observer . . . on the deck . . . sees the horizon much in the same direction and doesn’t realize it but perhaps he will find himself disembarking at a different island than the one he thought he was sailing for.”

Like father, like son, Justin Trudeau has captained Canada to a deceptive and unwelcome destination. What started as Fantasy Island is becoming Davy Jones’ Locker.

Lee Harding is a Research Fellow at the Frontier Centre for Public Policy

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2025 Federal Election

As PM Poilievre would cancel summer holidays for MP’s so Ottawa can finally get back to work

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From Conservative Party Communications

In the first 100 days, a new Conservative government will pass 3 laws:

1. Affordability For a Change Act—cutting spending, income tax, sales tax off homes

2. Safety For a Change Act to lock up criminals

3. Bring Home Jobs Act—that repeals C-69, sets up 6 month permit turnarounds for new projects

No summer holiday til they pass!

Conservative Leader Pierre Poilievre announced today that as Prime Minister he will cancel the summer holiday for Ottawa politicians and introduce three pieces of legislation to make life affordable, stop crime, and unleash our economy to bring back powerful paycheques. Because change can’t wait.

A new Conservative government will kickstart the plan to undo the damage of the Lost Liberal Decade and restore the promise of Canada with a comprehensive legislative agenda to reverse the worst Trudeau laws and cut the cost of living, crack down on crime, and unleash the Canadian economy with ‘100 Days of Change.’ Parliament will not rise until all three bills are law and Canadians get the change they voted for.

“After three Liberal terms, Canadians want change now,” said Poilievre. “My plan for ‘100 Days of Change’ will deliver that change. A new Conservative government will immediately get to work, and we will not stop until we have delivered lower costs, safer streets, and bigger paycheques.”

The ’100 Days of Change’ will include three pieces of legislation:

The Affordability–For a Change Act 

Will lower food prices, build more homes, and bring back affordability for Canadians by:

We will also:

  • Identify 15% of federal buildings and lands to sell for housing in Canadian cities.

The Safe Streets–For a Change Act 

Will end the Liberal violent crime wave by:

The Bring Home Jobs–For a Change Act 

This Act will be rocket fuel for our economy. We will unleash Canada’s vast resource wealth, bring back investment, and create powerful paycheques for workers so we can stand on our own feet and stand up to Trump from a position of strength, by:

Poilievre will also:

  • Call President Trump to end the damaging and unjustified tariffs and accelerate negotiations to replace CUSMA with a new deal on trade and security. We need certainty—not chaos, but Conservatives will never compromise on our sovereignty and security. 
  • Get Phase 2 of LNG Canada built to double the project’s natural gas production.
  • Accelerate at least nine other projects currently snarled in Liberal red tape to get workers working and Canada building again.

“After the Lost Liberal Decade of rising costs and crime and a falling economy under America’s thumb, we cannot afford a fourth Liberal term,” said Poilievre. “We need real change, and that is what Conservatives will bring in the first 100 days of a new government. A new Conservative government will get to work on Day 1 and we won’t stop until we have delivered the change we promised, the change Canadians deserve, the change Canadians voted for.”

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Automotive

Canadians’ Interest in Buying an EV Falls for Third Year in a Row

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From Energy Now

Electric vehicle prices fell 7.8 per cent in the last quarter of 2024 year-over-year, according to the AutoTader price index

Fewer Canadians are considering buying an electric vehicle, marking the third year in a row interest has dropped despite lower EV prices, a survey from AutoTrader shows.

Forty-two per cent of survey respondents say they’re considering an EV as their next vehicle, down from 46 per cent last year. In 2022, 68 per cent said they would consider buying an EV.

Meanwhile, 29 per cent of respondents say they would exclusively consider buying an EV — a significant drop from 40 per cent last year.

The report, which surveyed 1,801 people on the AutoTrader website, shows drivers are concerned about reduced government incentives, a lack of infrastructure and long-term costs despite falling prices.

Electric vehicle prices fell 7.8 per cent in the last quarter of 2024 year-over-year, according to the AutoTader price index.

The survey, conducted between Feb. 13 and March 12, shows 68 per cent of non-EV owners say government incentives could influence their decision, while a little over half say incentives increase their confidence in buying an EV.

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