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OTTAWA — Finance Minister Chrystia Freeland laid down a tax gauntlet for her Conservative opponents Monday, with a stand-alone motion making promised changes to capital gains taxes which will force the Conservatives to vote specifically on that measure.
“I do think this is a moment when Canadians should be watching closely what happens in the House and watching closely to see how MPs vote on this defining measure,” Freeland said at a press conference on Parliament Hill.
Minutes earlier, she had introduced a ways and means motion outlining the specifics for the capital gains tax change promised in the April budget. Capital gains are profits made on the sale of assets, such as a secondary residence or a stock option. Currently, individuals and corporations only pay tax on half of their capital gains.
The changes will increase that to two-thirds for all corporations and for capital gains earned by individuals above $250,000 in a single year.
Freeland is billing the change as a matter of fairness to ensure millionaires aren’t paying a smaller tax rate than middle-class income earners like nurses and teachers. The adjustment, expected to earn $19 billion over five years, will help the government pay for investments in health care, housing and child care without going deeper into debt, said Freeland.
“The fair way, the responsible way to pay for those investments is to ask the people at the top to pay a little bit more,” she said.
The motion comes as all parties, including the Conservatives, are jockeying to be seen as the one that best understands the impact inflation has had on the cost of living.
Freeland opted not to include the change in a ways and means motion tabled April 30 that included most of the other big budget promises.
By making this a stand-alone motion she is forcing the Conservatives to take a clear stand on the policy, which has been unpopular among some groups including doctors and small business, but more popular among younger Canadians who are a key voting bloc in the next election.
Thus far Conservative Leader Pierre Poilievre has dodged all questions about whether he and his party support the capital gains change by insisting it didn’t yet exist.
“For days and days, for weeks and weeks, they have been dithering and deflecting and evading when it comes to our proposed measures on capital gains,” Freeland said.
“Tomorrow, they’re going to have to take a stand.”
The vote on the government’s motion is scheduled for Tuesday and is expected to pass with support from the NDP. Legislation is expected soon after, but the legislation does not have to pass before the tax change is implemented on June 25. As long as the ways and means motion passes, the change will be in place in two weeks.
Freeland doesn’t need the Conservatives to support it, but is making it fodder for political purposes.
She even noted the whole idea of taxing capital gains first arose in Canada during the tenure of Tory prime minister John Diefenbaker and that it was another Conservative prime minister, Brian Mulroney, who raised the amount of capital gains taxed to 75 per cent while in office. The Liberals lowered it to 50 per cent in 2000, under prime minister Jean Chretien.
In question period Monday she pointed out that the Tories were not asking the government about the tax change.
A Poilievre spokesman still would not indicate where the party sits on Monday.
“Common sense Conservatives will study the motion very carefully before determining next steps,” the spokesman said.
He accused the government of “scrambling and making things up on the fly” and called the changes a tax on health care, homebuilding, small businesses, farmers and retirements which is opposed by doctors, small business owners and people saving for their retirement. Trudeau, he said, “is desperate to pay for the $61 billion in new inflationary spending announced in the latest budget.”
NDP Leader Jagmeet Singh said unlike the Liberals, his party has been calling for these changes for years.
“The Liberals are acting as if they haven’t been in power for nine years — they could have brought this in nine years ago if they were serious about it and now they’re acting like they care about the fact that there’s this unfairness going on,” Singh said outside the House of Commons Monday.
He also slammed the government for introducing the measure separately from the budget.
“They want to make this a political point,” Singh said. “But for us, this about justice and fairness.”
If the capital gains change had been included in the April 30 budget motion, the Tories could argue they were voting against the government’s overall policy and not one specific measure.
This report by The Canadian Press was first published June 10, 2024.
Mia Rabson and Stephanie Taylor, The Canadian Press