The Liberal government plans to force the Conservatives to vote this week on changes to the capital gains tax system that are due to come into effect on June 25th.
A federal official said Finance Minister Chrystia Freeland will launch the legislative process on Monday morning.
Freeland is expected to introduce a revenue bill in the House of Commons on Monday morning to signal the government’s intention to increase capital gains tax rates.
Freeland is due to make the announcement during a speech in Toronto on Sunday.
The finance motion is the first step that must be completed before a tax reform bill can be tabled. The motion is expected to be voted on later next week.
However, it is possible that the increase in participation rates could be implemented before the bill is passed.
Capital gains are the difference between the total purchase price and the selling price of an asset. Such assets include vacation homes, investment properties, stocks, mutual funds, etc. In Canada, it does not include your primary residence.
Currently, only 50 percent of capital gains are taxable. This is known as the blanket rate. For individuals, the blanket rate is set to increase from one-half to two-thirds on capital gains over $250,000 on June 25th. This means that for the first $250,000 of capital gains, taxpayers will pay tax on $125,000 of it. For every dollar over $250,000, tax will be taxable at two-thirds.
For corporations, there is no $250,000 threshold. Two-thirds of all capital gains made by corporations and trusts are taxable.
Asked whether an actual bill would be introduced during the current Diet session, a senior government official said, “It depends on whether the opposition parties also believe in the fairness of the tax.”
The Trudeau government has made no secret of its intention to separate the capital gains bill from the main budget bill in order to force the Conservatives to vote specifically on tax reform, allowing the Liberals to claim that the opposition doesn’t support imposing additional costs on the super-rich to support poor programs.
“This will give Canadians an opportunity to see the real Conservative party. Until now they have hesitated, they have dodged, they have not said whether they are in favor of asking people who are doing their best to pay a little more. Soon there will be no more opportunity for dodging,” Freeland said during a question-and-answer session last Tuesday.
A spokesman for Poirievre’s office declined to say Friday how the Conservative caucus would vote.
“We don’t have the details and can’t say how we will vote on bills or motions we haven’t seen yet,” the spokesman said.
The NDP has indicated it supports these changes.
“The New Democrats support small increases to the very wealthy and have been calling for this measure for years. It would provide some relief to people, but as always our decision will be made after careful consideration of the government’s motion,” New Democrat MP Peter Julian said in a media statement.
The move to start the legislative process comes after internal government polling showed the Liberal Party’s stepped-up messaging on the budget may be having some influence on public opinion.
The information campaign included a three-and-a-half minute video from the Chancellor explaining how the capital gains tax changes would work and who would be affected.
An internal survey conducted by the Privy Council Office and obtained by CBC News found that about a quarter of Canadians expect their taxes to increase as a result of the proposed reforms, down slightly from about 30 per cent in April.
The government argues that the changes would only affect 0.1 per cent of Canadians in any given tax year.
The poll also found that roughly three in five Canadians support increasing taxes on capital gains over $250,000.
The weekly survey was conducted among a random sample of 10,000 Canadians between March 11 and May 26. The latest weekly sample of 1,000 people has a margin of error of plus or minus 3.1 percentage points 19 times out of 20.
