Canadian Prime Minister Justin Trudeau ’s government announced Tuesday it is imposing higher taxes on the wealthiest Canadians as part of the federal budget.
The budget proposes to increase the capital gains inclusion rate, which refers to the taxable share of profit made on the sale of assets.
The taxable portion of capital gains above $250,000 Canadian (US$181,000) would rise from half to two-thirds, which the federal government says will only affect 0.1% of Canadians and raise nearly $20 billion Canadian (US$14.5 billion) in revenue over five years.
“I know there will be many voices raised in protest. No one likes paying more tax, even — or perhaps particularly — those who can afford it the most,” Finance Minister Chrystia Freeland said.
“But before they complain too bitterly, I would like Canada’s one per cent — Canada’s 0.1% — to consider this: What kind of Canada do you want to live in?”
Freeland presented the federal budget, which pledges $53 billion Canadian (US$38 billion) in new spending that she says is focused on economic justice for younger generations.
Freeland denied that her latest budget is mainly a political exercise — but nonetheless acknowledged that for anyone under 40 in Canada, it’s “just harder to establish yourself” than it was for the generations that came before.
Freeland delivered a budget that she said capped the federal deficit at $40 billion Canadian (US$29 billion).
Trudeau’s Liberal government is trailing badly in the polls amid concerns over the cost of living in Canada.
“This budget will do very little to improve Liberal prospects. They will be going down to defeat, and they know it,” said Nelson Wiseman, a political science professor at the University of Toronto. “Their only hope is if Justin Trudeau steps aside and a new Liberal leader is selected. And, even then, it would be difficult for them to prevail.”