(Bloomberg) — Canadian Prime Minister Justin Trudeau’s government will call for a vote this week on a planned increase in the capital gains tax rate, a move that would raise billions in additional government revenue and has drawn the ire of the business community.
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Finance Minister Chrystia Freeland will table a motion in the House of Commons on Monday, she said in a speech in Toronto on Sunday. The proposed reforms will follow the “broad lines” previously announced by the government, she said, including an implementation date of June 25 and no change to the exemption for profits on the sale of primary residences.
“Tomorrow we will introduce changes that will result in a small number of Canadians paying slightly more taxes,” Freeland said.
The government said in April that it plans to increase capital gains taxes on companies and individuals in years when they post profits of more than C$250,000 ($182,000). Currently, half of these profits are subject to corporate or personal tax; that will rise to two-thirds. Exemptions and discounts are available for owners of certain small businesses, farms and fishing operations.
The move has drawn criticism from business groups, who say it will harm Canada’s ability to attract investment and worsen productivity problems.
Trudeau said last month that the tax change is aimed at asking the wealthy to contribute more to society.
Freeland’s budget estimates the measure will raise nearly $20 billion in new tax revenue over the next five years — though that figure rests on the assumption that some investors will rush to sell assets by June 24. That is the last day to book profits at the current lower levels. tax rate.
–With help from Brian Platt.
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