Canada’s capital gains tax target falls short by C$2 billion, says budget officer
2024.08.01 17:18
OTTAWA (Reuters) – Canadian federal government’s target for a bump in its controversial capital gains tax over the next five years will fall short by a tenth, according to an analysis released on Thursday by the parliamentary budget officer.
Finance Minister Chrystia Freeland revealed a new tax on wealthy individuals in her budget in April which would bring in C$19.4 billion ($13.99 billion) over four years.
This windfall is expected to fund a bulk of the federal government’s ambitious housing plan, a lack of which is partly responsible for shrinking Prime Minister Justin Trudeau’s voter base and drop in approval ratings.
“The Parliamentary Budget Officer estimates an increase of $17.4 billion in income tax revenues from 2024-25 to 2028-29,” the budget officer said in an estimate.
Out of this, C$5.7 billion would be through personal income tax and C$11.6 billion would be through corporate incomes tax, it said.
This is C$2 billion less than projected by the finance ministry.
Freeland had said in April that only 0.13% of Canadians with an average income of C$1.4 million were expected to pay more personal income tax on their capital gains in any given year. But despite her assurances, the new tax was heavily criticized by individuals and businesses.
($1 = 1.3870 Canadian dollars)
