Close the capital gains loophole, now!

Facts

13 June 2024

Monopoly Man running away with money from tax loopholes

The capital gains exclusion loophole has unfairly advantaged wealthy Canadians for far too long. Since 2000, investors only pay taxes on 50% of their income from the sale of investments, while workers pay taxes on 100% of their earnings.

No matter how you spin it, it's not fair.

Budget 2024 brings a welcome change to this tax break for the rich, raising the capital gains inclusion rate from 50% to 67% on gains over $250,000, and to 67% on all gains for corporations.

Despite the obvious increase in fairness that this change represents, powerful groups have been pushing against the new policy with skewed polling, high-paid lobbyists, and misinformation.

This change impacts only 0.13% of Canadians - with an average income of $1.4 million - and would generate $19 billion over five years. That’s money that could go towards addressing urgent issues like the housing crisis, healthcare, and other public investments to get our economy get back on its feet.

Narrowing the capital gains exclusion loophole does not impact the sale of primary residences, RRSPs, or RESPs. It addresses an unjust policy that has put working Canadians at a disadvantage for decades.

Send a message to Ottawa: Canadians support the capital gains increase – a buck is a buck!

Take action

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To : Finance Minister Freeland

CC: Don Davies, Gabriel Ste-Marie, Mike Morrice, Jasraj Singh Hallan

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Dear Finance Minister Freeland,

I applaud the government's plan to raise the capital gains inclusion rate in the 2024 Budget. Our tax system is deeply unfair. Canadians are struggling with greedflation, a housing crisis, and rapidly rising inequality.

A recent report shows that the top 1% of income earners have the lowest tax burden. For over two decades, they have paid no tax on half of their capital gains from selling stocks, properties and other assets. Large corporations paying incredibly low income tax rates have profited as well.

Most Canadians earn their income through wages and salaries and see 100% included come tax time. In truth, all income should be taxed the same. Increasing the amount of capital gains subject to taxation from 50% to 66.7% is a good start.

I caution you against weakening the planned increase. The proposal already maintains the 50% tax break for the first $250,000 of annual personal capital gains. It also maintains, and in some circumstances, improves, special tax breaks for small businesses and entrepreneurs. Canada needs to stop making exceptions that entrench unfairness in our tax system. We need more tax fairness, not less.

Please stand by this important policy!

Sincerely,