Canadian Prime Minister Justin Trudeau’s government announced Tuesday that it will impose higher taxes on the richest Canadians as part of the federal budget.
The Budget proposes to increase the capital gains inclusion rate, which refers to the taxable portion of the gain on the sale of assets.
The taxable portion of capital gains above $250,000 Canadian (US$181,000) would rise from half to two-thirds, which the federal government says will affect just 0.1% of Canadians and nearly $20 billion Canadian (US$14.5) over five years billion) in revenue. .
“I know there will be many voices of protest. No one likes paying more taxes, even – or perhaps especially – those who can afford it the most,” said Finance Minister Chrystia Freeland.
“But before they complain too bitterly, I would like the one percent of Canada – the 0.1% of Canada – to think about this: What kind of Canada do you want to live in?”
Freeland presented the federal budget, which pledges C$53 billion ($38 billion) in new spending, which she said is aimed at economic justice for younger generations.
Freeland denied that her latest budget is largely a political exercise, but nevertheless acknowledged that it is “just harder for anyone under the age of 40 in Canada to establish yourself” than it was for generations before it.
Freeland put forward a budget that she said would cap the federal deficit at 40 billion Canadian dollars ($29 billion).
Trudeau’s Liberal government is trailing badly in the polls due to concerns about the cost of living in Canada.
“This budget will do very little to improve the Liberal prospects. They will face defeat, and they know it,” said Nelson Wiseman, a political science professor at the University of Toronto. “Their only hope is that Justin Trudeau steps aside and a new Liberal leader is elected. And even then it would be difficult for them to prevail.”