Today's discussion:

Slower growth, fewer jobs, a worse economy—the consequences of the capital gains tax shouldn’t be shrugged off

Canada is already experiencing a well-documented productivity crisis, with GDP per capita declining over the past several quarters. By reducing capital availability, this latest budget will only accelerate that ugly trend.

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John Wiliamson

The New Liberal Democratic Party is pounding the desk on how the tax will impact a tiny percentage of people- the Uber rich. Have a look at the forums as it dawns on Canadians that the new slate of taxes (and they’re only a warm up act for what’s coming) are in fact most impactful on the ordinary lives of working Canadians- those with retirement investments, those with small businesses, those with cottages, those with rental properties, artists, writers, truck drivers, small entrepreneurs…and interestingly start ups, engineers, professionals and doctors…all the people who are paying the brunt of taxes in the country now… Appallingly, the liberals are imposing the tax RETROACTIVELY on money, investments, property and investments made years ago in accordance with the rules and choices we had. Gotcha! Working people are enraged…..

19th April 2024 at 9:26 am
Paul M. Cook

It would be nice to have politicians that have lived in the real world.Most have not run or started companies.We have a family owned business and are trying to get it to a third generation.Raising the capital gains tax is not going to help us.

19th April 2024 at 10:42 am
A. Chezzi

The Capital gains tax is bad for Canada. Why? I am tired of hearing the uber rich complain about a tax. I am tired of hearing corporations say they are the source of employment and a tax will kill jobs. Workers produce the wealth these companies are making hand over fist and it is about time these companies pay their fair share. As for the uber rich, if they can afford luxury items, Gucci, or hotel rooms at thousands of dollars a night, or yatchs when the average person cannot afford a home, it is time they pay their fair share. A tax on wealth will affect a very small number and corporations will survive. So, stop the gripping and scare tactics and pay up.

19th April 2024 at 8:54 am
Greg Jackson

The problem with you and people like you, is that you don’t understand economics. There will be no net benefit to a capital gains tax in the future, because investment capital will go elsewhere. Trudeau and his fart-catchers in caucus don’t understand that investment capital can and will leave Canada for greener pastures. The best and the brightest will leave. Only jealous, non-productive people will remain in the socialist state.

19th April 2024 at 12:30 pm

Those selling land for develpment realize capital gains in most cases in excess of $250,000. Now either some land will be taken off the market to wait until the price increases enough to compensate for the higher tax or land prices will rise to partially compensate sellers. Net result, cost of housing increases.

19th April 2024 at 1:17 pm
Michael B

Do you have a defined pension plan ?

19th April 2024 at 11:09 am
Paul Attics

— But ask yourself why anybody would ever take on the risks associated with early-stage investing if they were subject to the top marginal Canadian tax rates which exceed 50 percent in most provinces. —

They will because they will continue to make big returns on their expected small number of hits. This tax change to the proportion of the highest end earners of capital gains is a shift, nothing fundamentally has changed. Quibbling with the “dollar-is-a-dollar” assertion because of the time-value-of-money (which applies to all money, not just venture) is not relevant to the main but dubious claim, early-stage investing will drop significantly because of this tax shift. It reminds me of the claims that a new national or provincial holiday will crush businesses. Lots of FUD (fear, uncertainty, and doubt) before, then nothing after.

Tax systems obviously need to be fair, consistent, and not deter positive economic activity. Our systems are likely suboptimal on all counts, but this latest capital gains shift doesn’t seem to be out-of-line to me.

19th April 2024 at 8:04 am
Michael B

And if an entrepreneur decides to set up shop in the US ? Canada is in a global competition for top talent – including doctors, engineers, IT personnel etc…the high earners and investors. That seems to have been forgotten.

19th April 2024 at 11:19 am
Paul Attics

This seems like a marginal increase at the higher end. I doubt that these measure would tip someone over into moving away from Canada. If there is hard data either way, I’d appreciate seeing it.
I would like to have seen this new tax mean we’d have a balanced budget and a prospect of a reducing the debt at some point in the foreseeable future…but no, deficit spending as far as the eye can see, or at least until a change in government.

19th April 2024 at 2:35 pm
Michael B

We’d both like to see the numbers of “Canadians” living full-time abroad and paying taxes in their new home country. This would not include temporary work absenteeism nor retirees as they are subject to Canadian taxes. Any young person graduating with most professional degrees would be more than welcome abroad as a permanent resident.
As I understand it there are three ways to reduce gov’t debt
– inflate it down. Pay off 2014 debt with depreciated 2024 dollars. “Print” cash to pay the debt.
– raise taxes and cut expenditures.
– grow the economy while increasing productivity.
The last requires massive capital investment, which is difficult to attract if capital gains and other taxes, as well as gov’t regulations, are considered too detrimental.

20th April 2024 at 11:38 am

It’s never an all or nothing deal. The return to risk is falling in Canada leading to rebalancing of investments and some of the investment will go elsewhere.

19th April 2024 at 1:21 pm