Six of Canada’s largest business associations, including the Canadian Canola Growers Association (CCGA), have written a joint letter to Deputy Prime Minister and Minister of Finance Chrystia Freeland, calling on her to withdraw the proposed changes to the capital gains tax. announced in the federal budget last month.
In addition to C.C.G.A. Letter of May 9th is signed by the Canadian Chamber of Commerce, the Canadian Federation of Independent Business, Manufacturers and Exporters of Canada, the Venture Capital and Private Equity Association of Canada, and the Canadian Franchise Association.
The government plans to increase the annual capital gains inclusion rate (taxable portion) from 50 percent to 67 percent from June 25, 2024. The measure is expected to increase government revenue by about $20 billion over the next four years. .
“This proposed measure seeks to provide a solution to Canada’s budget deficit, but it is short-sighted, complex, and sows division at a time when we need a Team Canada approach to economic growth.” “, the group said.
Budget 2024 was tabled by the Freeland and Liberal governments as addressing young Canadians’ concerns about intergenerational equity, but industry groups say the government is “taking actions now at the expense of future prosperity.” should be taken into consideration.”
The agricultural community is particularly concerned that this measure will not improve intergenerational equity. Higher capital gains taxes could be passed from sellers to buyers, making it more expensive for young farmers looking to expand.
“Simply put, this measure will limit opportunity for every generation and reduce Canada’s competitiveness and innovation. We are already working urgently to reignite our country’s lagging productivity. “At times, increasing taxes on productive investment and curbing Canada’s potential will have serious, long-term, and potentially irreversible effects,” the letter states.
The government says the higher capital gains tax rate will only apply to 12% of corporations and 0.13% of individual income tax filers, but it is expected to bring in around $20 billion in new tax revenue over the next four years. ing.
The government says the higher inclusion rate will only apply to 12% of corporations and 0.13% of individual income tax filers, but the organization says this is misleading and that over the next 10 years only 1 in 5 Canadians will be eligible for the higher inclusion rate. They argue that people will be directly affected. And all Canadians will feel the effects, directly or indirectly.
The Business Council of Canada represents CEOs and business leaders. sent a unique letter In a May 9 letter to Freeland, he expressed concern that changes to the capital gains tax would “further undermine Canada’s ability to attract investment and talent, effectively inhibiting strong and sustained economic growth.” did.
“More importantly, we believe the debate over capital gains tax overshadows a much larger concern: the government’s fiscal framework is unsustainable.” Business Council wrote Goldie Heider, CEO of . “Tax increases would not be necessary if governments took proactive steps to promote growth, such as reducing planned spending and removing regulatory barriers.”
Freeland has indicated he plans to introduce a separate bill to change the capital gains tax, separate from the omnibus budget implementation bill introduced in late April.
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