Many people in our community - and across Canada - are feeling the weight of heavy tax burdens. Another especially impactful tax hike includes recent changes to Canada’s capital gains taxation, which came into effect on June 25th, 2024, and raised the capital gains inclusion rate for individuals and corporations.
A report recently released by the Fraser Institute shows the average Canadian family is now spending more income on taxation (43%) than on basic necessities such as food, shelter, and clothing combined (35.6%). Tax hikes are increasing the cost of everything, and this federal government has overseen the worst decline in standards of living in the last 40 years, as reported by the Organisation for Economic Co-operation and Development (OECD).
Many have already voiced their concerns over the implications the government’s capital gains tax changes will have on investment, the economy, Canadians’ standard of living, and retirement plans. Some of the most pressing concerns are coming from small business owners, farmers, doctors, and homebuilders.
Small business owners, many who plan their retirement over the eventual sale of their business, have spoken out on how this tax hike will hurt them. I spoke to a local small business owner who said, “So much for my retirement. I want to be self sufficient and not rely on the government. I’m going to have to work longer now because the extra taxes to sell my business will eat into the money I was going to live off of.”
A recent survey of Canadian Federation of Independent Business (CFIB) members showed 55% of small business owners stated this tax hike will impact the eventual sale of their business, despite the Liberal government’s claim that the tax changes only affect 0.13% of the wealthiest of Canadians. The CFIB called to scrap the increase.
Similarly, the Council of Canadian Innovators, an organization representing many tech businesses, revealed 90% of respondents in a survey believe these tax changes will have a negative effect on the tech industry.
Farmers sounded the alarm on how these tax hikes will punish them. The Grain Growers of Canada (GGC), which represents many Canadian farmers, stated this tax hike “moves the goalposts” for the next generation to take over the family farm by dramatically increasing the cost of farms and pricing out many families. The GGC further stated that the only ones who will be able to afford to pay millions of extra dollars will either be corporate farms or development companies.
The Canadian Medical Association stated these tax increases will make it harder to recruit and retain doctors. They slammed this hike as a “a disincentive for new graduates considering community-based practice.” With such a large doctor shortage in Canada, the decision to penalize doctors is recklessly irresponsible.
At a time when homebuilding starts are already down this year, homebuilders also shared their concerns on these tax increases as another hurdle for investment in housing to address the ongoing housing crisis. In Parliament’s Housing Committee, I recently asked the Chief Economist of the Independent Contractors and Businesses Association of British Columbia how these tax increases will affect the construction of new homes. Worryingly, he said it will have a “dampening [and] negative effect on homebuilding.”
Across sectors, experts are telling the Liberal government how this tax hike will hurt the economy and the livelihoods of Canadians. Government Ministers can’t even defend and properly explain these tax changes. Recently, one Liberal Minister even removed an online video which incorrectly described the changes.
My Conservative colleagues and I have proposed a Tax Reform Task Force. Our proposal is to lower taxes on work, hiring, and building; reduce the share of taxes paid by the low/middle class; cut tax-funded corporate welfare and crack down on overseas tax havens; and simplify tax rules to remove 20% of paperwork.
Please reach out to me if you will be affected by these capital gains tax changes as it will be helpful for me when I return to Ottawa in the fall when the government introduces legislation on this.
If you need assistance with federal programs or have any thoughts to share, on this issue or others, feel free to reach out, at 250-470-5075 or at [email protected].