The Department of Finance claims it has no files or emails “regarding the deferral” of new capital gains terms to June 25, according to Blacklock’s Reporter. Finance Minister Chrystia Freeland’s department said it could find no documentation whatsoever on its selection of June 25 as the deadline to begin enforcing steep increases in the capital gains tax.The deferral date was also never explained in parliament, despite hearings on the matter. “After a thorough search no records exist in the Department of Finance,” the department wrote in a statement sent in response to an Access To Information request.The request asked for “all documents, records, files and correspondence regarding the deferral of new capital gains terms to June 25.”Freeland in her April 16 budget served notice of an increase in the tax from 50% to 66% of capital gains from the sale of stocks, vacation homes, businesses and other equity. The 50% rate was first introduced in 1972.Freeland told reporters May 21 the Trudeau Liberals are “putting forward a plan for tax fairness for all Canadians, a plan for fairness for every generation.” .Opposition MPs said they suspected the point was to reap a pre-election tax windfall. “To make the budget work they need $7 billion in the first year from capital gains,” Conservative MP Philip Lawrence told the Commons Finance Committee on May 7.“The government has set up an artificial fire sale by saying the legislation goes into place on June 25,” he said at the time. "I have no doubt there are Canadians right now preparing to sell their property to take advantage of the current capital gains rate as opposed to what that will be.”Budget Officer Yves Giroux in April 18 testimony at the Finance Committee said he was surprised by the random June 25 enforcement date. “That’s surprising to say the least,” said Giroux at the time.“The cigarette tax increase came into effect immediately because we didn’t want people to rush to the convenience store to buy cheaper cigarettes. However on capital gains, we don’t mind giving two months head’s up to those who could rearrange their taxable affairs to escape the higher capital gains rates. I don’t know why.”“Do you have any thoughts as to why that is?” asked MP Lawrence. “I was as surprised as you were,” replied Giroux.The Department of Finance estimated revenue from the equity tax will reach $6.9 billion this year. Collections in 2025 are forecast at half the figure, $3.4 billion.“It’s hard to think of a reason to do it other than the government wanted to incentivize people to sell their capital assets now to generate additional tax revenue,” Conservative MP Marty Morantz told the Finance Committee on April 22.“Would that be a reasonable assumption?” asked Morantz. “If that’s not the reason, that certainly will be the effect,” replied Giroux. “Usually you have budget secrecy to exactly avoid these situations.”
