Wednesday, May 22, 2024

Business Groups Urge Freeland to Scrap Capital Gains Tax Hike

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The business groups challenge the governments claim that the tax hike would only affect a small percentage of Canadians and businesses

In a letter addressed to Finance Minister Chrystia Freeland, prominent Canadian business associations are urging the government to reconsider its plan to increase the capital gains tax inclusion rate. The proposed change would see the tax rate on capital gains exceeding $250,000 rise from 50% to 66.7%, a move the groups argue will stifle investment, innovation, and growth in the country.

The letter, signed by organizations such as the Canadian Federation for Independent Business (CFIB), the Canadian Chamber of Commerce, and the Canadian Manufacturers and Exporters, highlights the potential negative impact on various sectors, including healthcare, employment opportunities, and small business succession.

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The business groups challenge the government’s claim that the tax hike would only affect a small percentage of Canadians and businesses, asserting that the repercussions would be far-reaching. They contend that one in five Canadian companies could be directly impacted within the next decade, with consequences felt by all Canadians.

CFIB president Dan Kelly emphasized the concerns of small business owners, citing a poll indicating that 72% believe the proposed changes would harm Canada’s investment climate. Kelly criticized the lack of detailed information provided by the government, making it difficult for businesses to assess the full implications of the tax hike.

Although the tax change was not included in the main budget bill, Finance Minister Freeland has indicated that separate legislation will be introduced for the proposed changes.

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