Conservative Leader Pierre Poilievre and his party opposed the Liberals' plan to increase Canada's capital gains inclusion rate on Tuesday, in a vote that still passed with the backing of the NDP and Bloc Quebecois.
The motion, paving the way for the Liberals to advance legislation to change Canada's tax laws accordingly, cleared the House of Commons by
To help offset billions in new spending on housing and social safety net supports, Finance Minister Chrystia Freeland announced in the April budget a coming hike to how much tax high earners must pay on the sale of assets or investments such as stocks and secondary properties.
The move – coming into effect on June 25 – will see the capital gains inclusion rate increased from 50 per cent to 67 per cent for individuals earning more than $250,000 in capital gains in a year, and on all capital gains realized by corporations and most types of trusts.
While for several weeks the Conservatives demurred on their position on the tax change – estimated to rake in $19.4 billion over five years – the proposal was quickly criticized by business groups as a "short-sighted" way to improve the deficit. Doctors, entrepreneurs and farmers were among its critics.
Defending against these voices, the Liberals asserted the changes will only impact the wealthiest 0.13 per cent, and approximately 12 per cent of Canada's corporations, given the existing capital gains exemption on primary residences will remain, while the lifetime exemption limits for small business shares, as well as farming and fishing properties, are increasing.
Freeland opted to pull this major tax reform out of the budget implementation bill, forcing the Conservatives to come out with a clear stance, and now likely setting up a summer's worth of attack lines for each side.
Poilievre outlines opposition
Speaking in the House of Commons just hours before declaring "nay," Poilievre outlined the reasons why Conservatives oppose the "giant job killing tax on health care, homes, farms and small businesses."
"He [Trudeau] wants to tax away doctors when we have a doctor shortage. He wants to tax homebuilders when we have a housing shortage. He wants to tax farmers when we have a food price crisis, and he wants to tax small businesses when our economy is already shrinking," Poilievre said.
"The good news is, if you're a billionaire, you won't pay it. The prime minister has given you two full months to sell your assets and get your money out of Canada to go build a business south of the border, or in some faraway place."
Poilievre also outlined Tuesday what a Conservative government led by him would do differently, including enacting a "tax reform task force" within 60 days of becoming prime minister and designing a "bring it home tax cut."
The Conservatives would also lower taxes on hiring and "making stuff," simplify tax rules, and reduce "the share of taxes paid by the poor and middle class, while cutting tax-funded corporate welfare and cracking down on overseas tax havens," he pledged.
Show 'true colours' Liberals say
Immediately after Poilievre made his position clear, the Liberals came out swinging, accusing the Conservatives of protecting Canada's richest by voting against tax fairness.
"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," Prime Minister Justin Trudeau said in question period.
"We're asking them to pay a little bit more so we can invest more in housing for young people to be able to have the same kinds of opportunities previous generations did."
In a later exchange with a Conservative MP, Freeland called it an "important day for Canadians."
"Because today, after taking eight weeks of truly undignified dithering and deflecting, the Conservatives have finally shown their true colours, and now we know what they really stand for. They had a chance to stand with the plumbers, with the welders, with the nurses, with the teachers, but they've decided that multimillionaires should pay lower taxes than working Canadians," she said.
