Trudeau to call for vote this week on controversial tax change

(Bloomberg) — Canadian Prime Minister Justin Trudeau’s government will call for a vote this week on a planned increase in the capital gains tax inclusion rate, a measure that would raise billions of dollars in additional government revenue and which aroused the ire of the business world. .

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Finance Minister Chrystia Freeland will introduce 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 changes to the capital gains exemption on the sale of main residences.

“Tomorrow we will introduce changes that will make a small number of Canadians pay a little more tax,” Freeland said.

The government announced in April that it planned to increase capital gains tax for businesses and individuals in years where they record gains above 250,000 Canadian dollars ($182,000). Currently, half of these gains are subject to corporate or personal income tax; this will increase to two thirds. Exemptions and reductions are available for owners of certain small businesses, farms and fishing operations.

The move has drawn widespread criticism from business groups, who argue it will hurt Canada’s ability to attract investment and worsen productivity problems.

Trudeau said last month the tax change was about asking the wealthy to contribute more to society.

Freeland’s budget estimates the measure will generate nearly C$20 billion in new tax revenue over five years – although that figure is based on the assumption that some investors will rush to sell assets by June 24 . tax rate.

–With help from Brian Platt.

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