The Canadian Federation of Independent Business (CFIB) published a release, on Thursday, 9 May, 2024, regarding its opposition to the proposed capital gains tax changes in the 2024 federal budget.
The proposal aims to increase the capital gains inclusion rate for corporations and trusts from one-half to two-thirds.
The capital gains inclusion rate for individuals also fall under the same increase, which is one-half to two-thirds of capital gains over CAD 250,000 realised on or after 25 June 2024.
The CFIB is also advocating for abolishing or amending this proposal to include the following:
- Protect the increase in the Lifetime Capital Gains Exemption to CAD 1.25 million.
- Expand the new Canadian Entrepreneurs’ Incentive to add all entrepreneurs which includes:
- all sectors, including farmers and fishers selling assets;
- non-founders to encourage people to invest in small firms;
- cut the 10-year implementation schedule in half.
- Scrap the planned increase in the general inclusion rate to 66.7%.
- If the government is unwilling to abandon this plan, it should:
- grandfather all existing capital gains using a V-Day (valuation day) as was done in 1971;
- allow corporations to benefit from CAD 250,000 each year at 50% inclusion like individuals;
- allow for 5-year income averaging to benefit from the CAD 250,000 annual threshold for larger capital gains for irregular events, like selling a property.
