The Liberal government plans to force the Conservatives to vote this coming week on changes to the country’s capital gains tax regime set to go into effect on June 25.
A senior federal government source said Finance Minister Chrystia Freeland will start the legislative process on Monday morning.
Freeland is expected to table a ways and means motion in the House of Commons Monday morning to signal the government’s intention to increase the capital gains inclusion rate.
Freeland is expected to announce this in a speech Sunday in Toronto.
A ways and means motion is a first step that must be completed before tax change legislation can be tabled. The motion is expected to be voted on later next week.
But the increase to the inclusion rate can go ahead before a bill is passed.
A capital gain is the difference between an asset’s cost and its total sale price. That asset could be a cottage, an investment property, a stock or a mutual fund. In Canada, primary residences are not included.
Right now, only 50 per cent of capital gains are taxable — what’s known as the inclusion rate. For individuals, the inclusion rate is set to increase from one half to two-thirds on capital gains above $250,000 on June 25. So for the first $250,000 in capital gains, a taxpayer will pay tax on $125,000 of it. Two-thirds of every dollar beyond $250,000 will be taxable.
For corporations, there will be no $250,000 threshold. Two-thirds of all capital gains earned by corporations and trusts will be taxable.
When asked whether actual legislation will be introduced before the end of this parliamentary sitting, a senior government source said, “That depends on whether or not the opposition parties also believe in tax fairness.”
The Trudeau government has made no secret of its goal in separating the capital gains legislation from the main budget bill. It wants to force the Conservatives to vote specifically on the tax changes. If they vote against it, the Liberals can argue the opposition doesn’t support making the very wealthy pay more for programs to help those less well off.
“It will give Canadians a chance to see the true colours of those Conservatives. So far, they have dithered, they have dodged and they have not said whether they are in favour of asking those who are doing the very best to pay a little more. Soon, they are not going to have a chance to dodge,” Freeland said in question period last Tuesday.
A spokesperson for Poilievre’s office wouldn’t say Friday how the Conservative caucus will vote.
“We cannot say how we will vote on legislation or a motion that we don’t have details of and have not yet seen,” said the spokesperson.
The NDP has indicated it supports the changes.
“New Democrats support making the ultra-wealthy pay a bit more and we have called for this measure for years. It will help give more relief to people, but as usual, we will look closely at the government’s motion before making a decision,” said NDP House leader Peter Julian in a media statement.
The move to start the legislative process comes as internal government polling shows that the Liberals’ ramped-up messaging on the budget may be having some effect on public opinion.
That communication push included a three-and-a-half-minute video by the prime minister explaining how the capital gains changes would work and who would be affected.
An internal poll conducted by the Privy Council Office and obtained by CBC News shows that about a quarter of Canadians expect to pay more taxes because of the proposed changes. That percentage has fallen slightly since April, when it was about 30 per cent.
The government has contended that the changes would only affect 0.1 per cent of Canadians in a given tax year.
The poll also found that about three in five Canadians support increasing taxes on capital gains above $250,000.
The weekly survey was conducted from a random sample of 10,000 Canadians between March 11 and May 26. The most recent weekly sample, which includes 1,000 people, has a margin of error of plus or minus 3.1 per cent, 19 times out of 20.
