The Parliamentary Budget Office is scrutinizing government claims that a proposed $17.4 billion capital gains tax hike will impact only a small fraction — 0.13% — of Canadians. Blacklock's Reporter says the Commons finance committee heard conflicting testimony this week on the validity of this figure.“My office plans to conduct additional analysis to estimate how many individuals will be affected by these changes over time, either directly or indirectly through corporations they own,” testified Budget Officer Yves Giroux. “We also plan to estimate how many unique individuals would be affected at least once over a certain number of years.”Conservative MP Marty Morantz (Charleswood–St. James, Man.) questioned the government’s 0.13% estimate. “That has got to be hundreds of thousands of people, would it not be?” asked Morantz. Giroux confirmed that “the number of individuals and corporations affected is in the thousands.”Giroux also explained that future analysis would investigate whether those affected face capital gains taxes once or multiple times in their lifetime.Morantz challenged the accuracy of the government’s claim, sharing testimony from a local plumber who dismissed the idea of being in the 0.13%. “We have heard testimony from many people at this committee who are not in this 0.13%,” said Morantz. He added that successive Canadian governments have historically treated capital gains differently from wages to incentivize risk-taking.A pending tax bill would increase the tax inclusion rate for capital gains from 50 to 66%, impacting profits from sales of small businesses, commercial properties, or vacation homes. New Democrat MP Don Davies (Vancouver Kingsway) noted that, according to the Department of Finance, 28.5 million Canadians never earn capital gains, and that most capital gains are earned by a small subset of high-income individuals.“Budget 2024 stated 0.13% of Canadians with an average income of $1.4 million are expected to pay more personal income tax on capital gains,” said Davies. He asked Giroux if the government’s estimate seemed reasonable. Giroux replied, “That seems to be a reasonable assessment of the number of Canadians directly affected by the capital gains inclusion rate,” but acknowledged there could be indirect effects on corporations and their shareholders.However, tax expert Kim Moody of Moody’s LLP Tax Advisors called the 0.13% figure "false and misleading." Testifying before the committee, Moody criticized the government’s use of the statistic, calling it “divisive, misleading, and disgusting.”Giroux's office has committed to further analysis to clarify how many Canadians will be impacted by the proposed tax changes.
The Parliamentary Budget Office is scrutinizing government claims that a proposed $17.4 billion capital gains tax hike will impact only a small fraction — 0.13% — of Canadians. Blacklock's Reporter says the Commons finance committee heard conflicting testimony this week on the validity of this figure.“My office plans to conduct additional analysis to estimate how many individuals will be affected by these changes over time, either directly or indirectly through corporations they own,” testified Budget Officer Yves Giroux. “We also plan to estimate how many unique individuals would be affected at least once over a certain number of years.”Conservative MP Marty Morantz (Charleswood–St. James, Man.) questioned the government’s 0.13% estimate. “That has got to be hundreds of thousands of people, would it not be?” asked Morantz. Giroux confirmed that “the number of individuals and corporations affected is in the thousands.”Giroux also explained that future analysis would investigate whether those affected face capital gains taxes once or multiple times in their lifetime.Morantz challenged the accuracy of the government’s claim, sharing testimony from a local plumber who dismissed the idea of being in the 0.13%. “We have heard testimony from many people at this committee who are not in this 0.13%,” said Morantz. He added that successive Canadian governments have historically treated capital gains differently from wages to incentivize risk-taking.A pending tax bill would increase the tax inclusion rate for capital gains from 50 to 66%, impacting profits from sales of small businesses, commercial properties, or vacation homes. New Democrat MP Don Davies (Vancouver Kingsway) noted that, according to the Department of Finance, 28.5 million Canadians never earn capital gains, and that most capital gains are earned by a small subset of high-income individuals.“Budget 2024 stated 0.13% of Canadians with an average income of $1.4 million are expected to pay more personal income tax on capital gains,” said Davies. He asked Giroux if the government’s estimate seemed reasonable. Giroux replied, “That seems to be a reasonable assessment of the number of Canadians directly affected by the capital gains inclusion rate,” but acknowledged there could be indirect effects on corporations and their shareholders.However, tax expert Kim Moody of Moody’s LLP Tax Advisors called the 0.13% figure "false and misleading." Testifying before the committee, Moody criticized the government’s use of the statistic, calling it “divisive, misleading, and disgusting.”Giroux's office has committed to further analysis to clarify how many Canadians will be impacted by the proposed tax changes.
