By Canadian Press

Conservatives oppose Liberal tax changes that include adjustment to capital gains tax

Jun 11, 2024 | 1:04 PM

OTTAWA — The Conservatives say they will oppose new tax measures introduced in the Liberal budget.

The Conservatives have not previously stated their position on the government’s plan to increase capital gains taxes to help pay for investments in health care, housing and clean technology.

But the Liberals forced their hand when Finance Minister Chrystia Freeland introduced a stand-alone motion Monday to put the tax adjustment in place.

The Conservative statement was released just over an hour before the House of Commons is set to vote on that motion, along with a 15-minute YouTube video featuring Tory Leader Pierre Poilievre.

The written statement didn’t contain the words “capital gains,” but it used the same language a Conservative spokesman provided when asked about the capital gains motion on Monday.

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“Conservatives oppose (Prime Minister Justin) Trudeau’s job-killing tax on health care, homes, farms and small business,” the Tuesday statement is headlined.

It goes on to say that the Liberals have given billionaires two months to move their assets out of Canada, since the tax measure was promised in the April budget. If the motion passes, the tax change will take effect June 25.

The change affects the proportion of capital gains that are taxed.

Currently, tax is applied only to 50 per cent of capital gains — or profits on assets that individuals or corporations sell, such as secondary properties or stock options.

The adjustment means that corporations will start paying tax on two-thirds of their capital gains and individuals will pay it on two-thirds of profits that exceed $250,000. Primary residences will continue to be exempt.

Freeland insists it is a fairness tax to make sure wealthy individuals whose income comes from selling assets don’t pay a lower tax rate than middle-class Canadians who have less overall wealth.

“These changes will result in a small number of well-off Canadians paying a little more tax when they sell a successful investment,” she said.

The change is expected to raise $19 billion over five years, and Freeland said that means Canada can make “fiscally responsible” investments that help the middle class, including on health care, home-building, child care and dental care without going deeper into debt.

“It will help make life cost less for Canadians,” she said.

The Conservatives dismiss the Liberals’ claims outright.

Tory Leader Pierre Poilievre said in the statement that the Liberals have made most Canadians pay more taxes while standing by as life becomes more unaffordable.

The Liberals constantly promise to tax the rich but always end up taxing the middle class instead, Poilievre claimed.

“Nine years ago, the prime minister promised he could spend uncontrollably and there’d be a rich guy on a hill somewhere who would pay the bill,” he said.

It hasn’t happened, Poilievre said, as the total net worth of the richest Canadians has doubled while the middle class can’t afford homes or food.

He said he would create a “tax reform tax force” within 60 days of becoming prime minister that would simplify tax rules, cut taxes and reduce corporate welfare.

Trudeau said in question period that Poilievre is siding with millionaires.

“If it didn’t have real-world impacts on Canadians, it would almost be amusing to watch the Conservative leader tie himself in knots to try and justify voting in favour of advantages for the wealthy Canadians when they sell really profitable investments,” Trudeau said.

This report by The Canadian Press was first published June 11, 2024.

Mia Rabson, The Canadian Press