The Canadian government is proposing changes to the capital gains tax, which have sparked debate among experts and stakeholders. The change would increase the inclusion rate, the share of an individual’s capital gains that are subject to income tax rates, from 50% to 67% for gains of $250,000 or more. The government argues that the wealthiest Canadians should pay their fair share and that only a small proportion of Canadians (0.13%) would be affected by the change. Opponents, including tech executives and doctors, argue that the changes would discourage business investment, harm economic growth, and make it harder to recruit and retain skilled professionals. However, economists emphasize that the impact of these changes is difficult to quantify and may have both positive and negative effects. The government has learned from the controversy surrounding tax changes in 2017 and is taking a more explicit and purposeful approach to connecting the tax changes to new spending proposals.
